2 On January 1, Ruiz Company issued bonds as follows: 3 4 Face Amount: 5 Number of Years: 6 Stated Interest Rate: 7 Interest payments per year 8 9 Required: $500,000 15 7% 2 14 15 a) 10 1) Calculate the bond selling price given the two market interest rates below. 11 Use formulas that reference data from this worksheet and from the appropriate future 12 this worksheet). 13 Note: Rounding is not required. Annual Market Rate 9% 16 Semiannual Interest Payment: $17,500 17 PV of Face Amount: 18 PV of Interest Payments: 19 =Bond Selling Price: 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 +PV of Interest Payments: 25 26 =Bond Selling Price: 27 2. Use the answer either "Premium" or "Discount" to the following items. 28 29 The bond in (a) sold at a: 30 The bond in (b) sold at a: 31 32 3. Use the Excel PV function to verify the selling prices of the bonds. 33 a) 34 35 36 b) 37 38 39 Annual Market Rate Bond Selling Price Annual Market Rate Bond Selling Price 9% 6%