The Seoul Special City is issuing a 20 year bond with a face value of $5,000,000 and a stated annual interest rate of 6%. The city will make interest payments twice a year. Answer all questions below.
1. Calculate the semi-annual interest payment.
2. Calculate how much the city will receive from the bond offering under the following conditions:
1) Market interest rates remain unchanged at the time of the offering.
2) Market interest rates decreases to 5% at the time of the offering.