On July 1, 2005, the City of Garbo Capital Projects Fund received the proceeds of a $1 million face amount, 6% five-year serial bond issue, $200,000 principal plus interest payable annually, to finance the construction of a new elementary school. The bonds were issued to yield 8%.
Prepare a working paper to compute the proceeds (present value) of the City of Garbo 6% serial bonds on July 1, 2005.