Chicago Corp. issued 9-year $750,000 bond on January 1, 2006 with coupon rate of 10%. The bond pays interest semiannually every June 30 and December 31, with the principal to be paid at the end of year 9. The effective market interest rate at the issuance date is 8%.

a. To calculate the proceeds what would you use for RATE, NPER, PMT, FV ?

RATE =

NPER =

PMT =

FV =

b. Will the bond be issued at par, at a discount or at a premium?

c. What annual coupon rate would Chicago Corp have to offer in order to obtain total proceeds of $750,000 on the issuance of these bonds