Blast from the Past issued 5-year bonds with a coupon rate of 4% paid annually and a face value of $500,000. The market interest rate is 5%. In the space provided below, calculate the present value of the bonds using PV tables (or your financial calculator) assuming payments are made at the end of the period (round answer to the nearest dollar). Show your work! NOTE: THE PV tables are found at the end of this exam. PV Tables PRESENT VALUE TABLES Present Value of 1 (PV1,I,n) This table shows the present value of 1 discounted at various rates of interest and for various time periods. It is used to compute the present value of single payments Number of Periods 2% 2% % 3% 5% 6% 7% 8% 9% 10% .98039 3 .94232 .92860 91514 .97561 97087 .96154 95238 94340 .96117 95181 .94260 92456 90703 88900 86384 83962 93458 92593 .89000 92385 90595 88849 85480 82270 79209 .76290 5 90573 88385 86261 82193 .78353 .74726 91743 90909 87344 85734 84168 81630 .79383 77218 .75131 .73503 .70843 68301 71299 .68058 64993 .62092 82645 6 .88797 86230 83748 79031 .74622 .70496 .66634 7 .87056 .84127 .81309 75992 .71068 .66506 8 85349 .82075 .78941 .73069 9 83676 80073 .76642 70259 .64461 .67684 .62741 59190 .63017 59627 .56447 .62275 .58349 54703 51316 58201 54027 .50187 46651 54393 .50025 46043 42410 10 82035 .78120 74409 67556 61391 55839 50835 46319 42241 38554 11 .80426 .76214 72242 64958 58468 52679 47509 42888 3875 35049 12 78849 74356 70138 62460 55684 49697 44401 39711 35553 31863 IT IS USED TO Compute the present value of single payments Number of Periods 2% 2% % 3% 4% 5% 6% 7% 8% 9% 10% 1 98039 .97561 97087 96154 2 .96117 .95181 94260 .92456 95238 90703 .94340 .89000 93458 92593 .91743 87344 .85734 84168 .90909 82645 3 94232 92860 91514 88900 86384 4 92385 90595 88849 85480 82270 5 90573 88385 86261 82193 78353 74726 71299 68058 83962 .81630 .79383 .79209 .76290 73503 70843 68301 64993 77218 .75131 62092 6 88797 .86230 83748 .79031 74622 .70496 66634 .63017 59627 56447 7 87056 84127 1309 .75992 71068 66506 62275 58349 54703 51316 8 85349 82075 .78941 .73069 67684 .62741 .58201 54027 50187 46651 9 .83676 80073 76642 .70259 64461 59190 54393 50025 46043 42410 10 82035 .78120 .74409 67556 61391 55839 50835 46319 42241 38554 11 80426 .76214 .72242 .64958 58468 52679 47509 42888 38753 35049 12 .78849 .74356 .70138 .62460 55684 13 77303 14 72542 .68095 75788 70773 66112 15 .74301 69047 60057 57748 .64186 55526 48102 36245 49697 44401 39711 35553 31863 53032 46884 41496 .36770 32618 28966 50507 44230 38782 34046 29925 26333 41727 .31524 27454 23939 Present Value of an Ordinary Annuity of n Payments of 1 Each (PVA,I,n) This table shows the present value of an ordinary annuity of 1 at various interest rates and for various time periods. It is used to compute the present value of a series of payments made at the end of each interest compounding period. Number of Periods 2% 2% 3% 4% 5% 10% 98039 97561 97087 96154 95238 1.94156 1.92742 1347 1.88609 2.88388 2.85602 2.77509 2.82861 2.72325 3.80773 3.76197 4.71346. 4.64583 4.57971 3.71710 5.60143 5.50813 6.47199 5.41719 5.24214 6.34939 6.23028 6.00205 7.32548 7.17014 7.01969 6.73274 6.46321 94340 93458 1.83339 1.85941 1.80802 1.78326 2.67301 2.62432 2.57710 3.23972 3.16987 3.62990 3.54595 3.46511 3.38721 3.31213 4.45182 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 4.48592 4.35526 5.07569 4.917320 4.76654 4.62288 5.78637 5.58238 5.38929 5.20637 6.20979 5.97130 5.74664 92593 91743 90909 1.75911 1.73554 2.53129 2.48685 5.03295 4.86842 5.53482 5.33493 9 8.16224 7.97087 7.78611 7,43533 7,10782 6.80169 6.51523 6.24689 5.99525 5.75902 10 8.98259 8.75206 8.53020 8.11090 7.72173 7.36009 7.02358 6.71008 11. 9.78685 9.51421 9.25262 8.76048 8.30641 7.88687 7.49867 7.13896 12 10.57534 10.25776 9.95400 9.39507 8.86325 13 11.34837 10.98318 10.63496 9.98565 9.39357 8.38384 7.94269 7.53608 8.85268 8.35765 7.90378 6.41766 6.14457 6.80519 6.49506 7:16073 6.81369 7.48690 0336 14 12.10625 11.69091 11.29607 10.56312 9.89864 9.29498 8.74547 8.24424 7.78615 736669 This table shows the present value of an ordinary annuity of 1 at various interest rates and for various time periods. It is used to compute the present value of a series of payments made at the end of each interest compounding period. Number of Periods 2% 2% % 3% 4% 5% 6% 7% 8% 10% 98039 97561 97087 96154 95238 1.94156 1.92742 1.91347 1.88609 1.85941 94340 93458 1.83339 1.80802 1.78326 92593 91743 90909 1.75911 1.73554 2.88388 2.85602 2.82861 2.77509 2.72325 2.67301 2.62432 2.57710 2.53129 2.48685 3.80773 3.76197 3.71710 4.71346 4.64583 4.57971 3.62990 3.54595 3.46511 3.38721 3.31213 3.23972 3.16087 6 5.60143 5.50813 5.41719 5.24214 4.45182 4.32948 4.21236 4.10020 3.99271 3.88965 3.79079 5.07569 4.917320 4.76654 4.62288 4.48592 4.35526 7 6.47199 6.34939 6.23028 6.00205 5.78637 5.58238 5.38929 5.20637 5.03295 4.86842 B 7.32548 7.17014 7.01969 9 8.16224 10 10 6.73274 7.97087 7.78611 7.43533 7.10782 8.98259 8.75206 8.53020 8.11090 7.72173 12 11 9.78685 9.51421 9.25262 8.76048 12 8.30641 10.57534 10.25776 9.95400 9.39507 8.86325 13. 11.34837 10.98318 10.63496 9.98565 9.39357 6.46321 6.20979 5.97130 5.74664 5.53482 5.33493 6.80169 6.51523 6.24689 5.99525 5.75902 7.36009 7.02358 6.71008 6.41766 6.14457 7.88687 7.49867 7.13896 6.80519 6.49506 8.38384 7.94269 7.53608 7.16073 6.81369 8.85268 8.35765 7.90378 7.48690 7.10336 14 12.10625 11.69091 11.29607 10.56312 9.89864 9.29498 8.74547 8.24424 7.78615 7.36069 15 12.84926 12.38138 11.93794 11.11839 10.37966 9.71225 9.10791 8.55948 8.06069 7.60608