1. Wesfarmers Ltd, a company listed on the ASX, issues 10,000 five-year unsecured notes with a coupon rate of 6.5 percent paid annually and a face value of $1,000. At the time of issuance the market interest rate is 6.0 percent meaning that the investor will pay $1021.06 for each bond. Using the effective interest rate method of amortization and assuming there are no costs of issuance, the carrying value of the debt after one year will be closest to:

a)$10.17 million.

b)$9.95 million.

c)$10.21 million.

show the calculation and present correct answer.