7

Cargo Express Airways issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Cargo Express Airways received $206,948 in cash proceeds. Which of the following statements is true?

- Cargo Express Airways must pay $200,000 at maturity plus 20 interest payments of $8,000 each.

- Cargo Express Airways must pay $200,000 at maturity plus 20 interest payments of $7,500 each.

- Cargo Express Airways must pay $200,000 at maturity and no interest payments.

- Cargo Express Airways must pay $206,948 at maturity plus 20 interest payments of $8,000 each.