Question
Citywide Company issues bonds with a par value of $68,000 on their stated issue date. The bonds mature in six years and pay 8% annual
Citywide Company issues bonds with a par value of $68,000 on their stated issue date. The bonds mature in six years and pay 8% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 6%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
1. | What is the amount of each semiannual interest payment for these bonds? |
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2. | How many semiannual interest payments will be made on these bonds over their life? |
3. | Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. See attachment for #4 and #5 |
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