Auerbach Incorporated issued 7% bonds on October 1, 2024. The bonds have a maturity date of September 30, 2034 and a face value of $275 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2025. The effective interest rate established by the market was 9%.

How much cash interest does Auerbach pay on March 31, 2025?

$19.25 million

Incorrect

$12.38 million

$9.63 million

$24.75 million