Issue Price

Parker Limited plans to issue $300,000 face value bonds with a stated interest rate of 10%. They will mature in 6 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%.

Required:

For each market interest rate, answer the following questions. Refer to the tables above for present value factors. Round calculations and answers to the nearest whole dollar.

		Market Rate
	10%	8%	12%
1. What is the amount due at maturity?
2. How much cash interest will be paid every six months?
3. At what price will the bond be issued?