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1. AL issues 6.0%, 10-year bonds with a face amount of $1,000,000 for $1,003,688.78 . The market interest rate for bonds of similar risk and
1. AL issues 6.0%, 10-year bonds with a face amount of $1,000,000 for $1,003,688.78. The market interest rate for bonds of similar risk and maturity is 5.95%. Interest is paid annually.
a. A ten year bond issue with a total face amount of $2,250,000 bears interest at the rate of 4.75%. The current market rate of interest is 4.50%. Determine the issue price of this annual bond. (rounded to nearest dollar)
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