1. On January 1, 2011, Michaels Incorporated issued $8,000,000 of 10-year bonds at a 11% stated

interest rate to be paid annually. Calculate the issuance price if the market rate of interest is 9%

(Choose the best answer).

(F) $8,000,000

(G) $9,023,840

(H) $8,923,840

(I) $11,376,000

(J) $9,975,023

2.

On November 1, 2016, O&R Ltd. sold 300, $1,000, ten-year, 7% bonds at 96. The bonds were dated

November 1, 2016, and interest is payable each November 1 and May 1. The amount of discount

amortization at each semi-annual interest date would be (assume straight-line amortization). (Choose

the best answer)

(F) $1,019

(G) $12,000

(H) $1,200

(I) $600

(J) $900

3.

A company is scheduled to make annual payments to a pension fund at the end of the next three

years. The present value of those payments is $100,000. Which of the following amounts is nearest the

amount which must be paid annually if the fund is projected to earn interest at the rate of 8% per

year?

(A) $33,333

(B) $26,461

(D) $41,990

(D) $38,803

(E) $39,403