On 1 July 2019 Tallows Ltd issued a $5 million four year bond that pays an annual coupon of 10%, with the first interest payment due on 30 June 2020. At the time of the issue of the bond, the market rate of return is 8%.

Using the effective interest rate method, what is the change in value of the liability after the first year?

Discount factors.pdf

Selected Answer:	the bond value decreases by $ 73,503
Answers:	the bond value decreases by $ 73,503
	the bond value decreases by $ 500,000
	the bond value increases by $ 500,000
	the bond value increases by $ 73,503

can you tell me how can i calculate it?