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Citywide Company issues bonds with a par value of $72,000 on their stated issue date. The bonds mature in ten years and pay 11% annual
Citywide Company issues bonds with a par value of $72,000 on their stated issue date. The bonds mature in ten years and pay 11% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 10%. (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? Par (maturity) value Semiannual Rate Semiannual cash interest payment 2. How many semiannual interest payments will be made on these bonds over their life? Number of payments 3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium. At a discount At a premium At par 4. Compute the price of the bonds as of their issue date. (Round intermediate calculations to the nearest dollar amount.) Table values are based on: n = Cash Flow Table Value Amount Present Value Par (maturity) value Interest (annuity) Price of bonds
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