1. Describe and interpret the assumptions related to the problem.
2. Apply the appropriate mathematical model to solve the problem.
3. Calculate the correct solution to the problem. A shipping company sold an issue of 20-year $1,000 par bonds to build new ships. The bonds pay 7.5% interest, compounded annually. Today's required rate of return is 6.5%. How much should these bonds sell for today? Round to two decimal places.