Total interest expense is the difference between the amount paid by the issuer and the amount received from the bondholder.
Present value of the bond is computed as follows: FV = 1,000; PMT = [(1,000)(0.08)] / 2 = 40; I/Y = 5; N = 10; CPT → PV = -923
[($40 coupon payments)(10 periods) + $1,000 par value] – $923 present value of the bond = 477
