On January 1, 2019, $40 Million Face Amount of 5

Multiple Choice

On January 1, 2019, $40 million face amount of 5%, 20-year bonds were issued.The bonds pay interest on a semiannual basis on June 30 and December 31 each year.The market interest rates were slightly higher than 5% when the bonds were sold. How much interest will be paid semiannually (each year on June 30 and on December 31) on these bonds?

A) $1,000,000
B) $2,000,000
C) Slightly less than $1,000,000
D) Slightly more than $2,000,000