If the bond of the previous problem paid 10 percent interest per year ($100), at what price

Question:

If the bond of the previous problem paid 10 percent interest per year ($100), at what price would it sell?

Data from previous problem 

What is the present value of $1,000 due in ten years, discounted at 14 percent?

What is the present value of $140 per year for a period of ten years if the rate of interest used to discount the payments back to the present is 14 percent?

At what price would a 14-percent, $1,000, ten-year bond sell if it is to yield 14 percent? Assume annual interest payments.


a. Record its issuance (use a Discount account).

b. Record the first year’s interest.

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