Question: On January 1, 2014, Huff Corp. issued $1,000,000 face value of 10% per year bonds (with annual interest payments to be paid each 31st December)

On January 1, 2014, Huff Corp. issued $1,000,000 face value of 10% per year bonds (with annual interest payments to be paid each 31st December) at a time when the market demanded an 11% return. The original maturity was ten years. Using the effective interest rate method of amortization, calculate the interest expense for 2015.

a. $103,521.85 b. $103,909.25 c. $207,431.09

B is the right answer but I keep getting A. I need to know what is the correct way to solve this problem using a BA II plus calculator.

	Inputs	2nd AMORT
N	10	P1	1
I/Y	11	P2	1
PV	CPT=941,107.68	Bal	944,629.52
PMT	-100,000	PRN	3,521.84
FV	-1,000,000	INT	103,521.84

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