2 On January 1, Ruiz Company issued bonds as follows: \begin{tabular}{l|rr} \hline 3 & & \\ \hline 4 & Face Amount: & $500,000 \\ \hline 5 & Number of Years: & 15 \\ \hline 6 & Stated Interest Rate: & 7% \\ \hline 7 & Interest payments per year & 2 \end{tabular} Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottom this worksheet) Note: Rounding is not required. a) b) Annual Market Rate 6.00% \begin{tabular}{|l|l|} \hline b) & Annual Market Rate \\ & Semiannual Interest Payment: \\ & PV of Face Amount: \\ + & PV of Interest Payments: \\ = & Bond Selling Price: \\ \hline \end{tabular} 2. Use the answer either "Premium" or "Discount" to the following items. The bond in (a) sold at a: The bond in (b) sold at a: 3. Use the Excel PV function to verify the selling prices of the bonds. a) \begin{tabular}{l|} Annual Market Rate \\ Bond Selling Price \end{tabular} b) Annual Market Rate 6% Bond Selling Price 2 On January 1, Ruiz Company issued bonds as follows: \begin{tabular}{l|rr} \hline 3 & & \\ \hline 4 & Face Amount: & $500,000 \\ \hline 5 & Number of Years: & 15 \\ \hline 6 & Stated Interest Rate: & 7% \\ \hline 7 & Interest payments per year & 2 \end{tabular} Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottom this worksheet) Note: Rounding is not required. a) b) Annual Market Rate 6.00% \begin{tabular}{|l|l|} \hline b) & Annual Market Rate \\ & Semiannual Interest Payment: \\ & PV of Face Amount: \\ + & PV of Interest Payments: \\ = & Bond Selling Price: \\ \hline \end{tabular} 2. Use the answer either "Premium" or "Discount" to the following items. The bond in (a) sold at a: The bond in (b) sold at a: 3. Use the Excel PV function to verify the selling prices of the bonds. a) \begin{tabular}{l|} Annual Market Rate \\ Bond Selling Price \end{tabular} b) Annual Market Rate 6% Bond Selling Price