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A major airline is planning to purchase new airplanes. It wants to borrow $800 million by issuing bonds. The bonds are for a 10-year period

A major airline is planning to purchase new airplanes. It wants to borrow $800 million by issuing bonds. The bonds are for a 10-year period with simple interest computed quarterly at a rate of 2 percent per quarter. Interest is to be paid each quarter to bondholders. How much will the airline have to pay in quarterly interest? How much interest will it pay over the 10-year period?

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