Issue Price

The following terms relate to independent bond issues:

1. 630 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments
2. 630 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments
3. 820 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments
4. 1,880 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments

Use the appropriate present value table:

PV of $1

PV of Annuity of $1

Required:

Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar.

What is the selling price of the bond issue in each situation?

Situation - Selling Price of the Bond Issue

a. $ ______________

b. $ ______________

c. $ ______________

d. $ ______________

TABLE 9-2 Present Value of $1 (N) Periods 2% 3% 5% 6% 7% 8% 10% 12% 15% 1 98039 .96154 .95238 .93458 92593 90909 .89286 .97087 .94260 91514 .90703 .96117 .94232 .85734 .94340 .89000 .83962 .82645 .92456 .88900 .87344 .81630 .79719 .71178 86957 .75614 .65752 .86384 79383 3 4 .75131 .68301 .92385 .88849 .85480 .76290 .63552 .57175 .73503 .68058 5 .90573 .86261 .82193 71299 .56743 .62092 .56447 6 .88797 .83748 .79209 74726 .70496 .66506 .62741 .79031 .66634 .63017 7 .62275 .51316 .87056 .85349 .81309 .78941 .75992 .73069 .58349 .54027 50663 45235 40388 8 .58201 46651 42410 .70259 .59190 .54393 9 10 .83676 .82035 .76642 .74409 .72242 .50025 46319 .36061 .32197 49718 43233 37594 32690 28426 .24718 21494 .18691 .16253 .38554 .67556 .64958 .82270 .78353 .74622 .71068 .67684 .64461 .61391 .58468 .55684 .53032 .50507 48102 45811 .43630 41552 .55839 .52679 11 .80426 .35049 .50835 47509 44401 .41496 42888 39711 .28748 .25668 12 .70138 .62480 49697 .78849 77303 .31863 .28966 13 .68095 46884 .36770 .22917 14 .75788 .60057 .57748 55526 .38782 .34046 .26333 20462 .14133 15 .74301 .36245 .31524 .23939 .12289 16 .72845 .53391 .66112 .64186 .62317 .60502 .58739 -57029 44230 41727 .39365 37136 .35034 .21763 17 .18270 16312 .14564 .71416 .33873 .31657 .29586 .29189 27027 .25025 .51337 49363 .19784 18 .70016 .17986 .13004 19 .33051 . 16351 .11611 .23171 .21455 20 .47464 45639 42196 .39012 31180 27751 .68643 .67297 .64684 .62172 .59758 .57437 .55207 22 24 39573 37689 34185 31007 28124 25509 23138 .55368 -52189 49193 46369 43708 41199 .24698 .10686 .09293 .08081 .07027 .06110 .04620 .03493 .02642 .01997 27651 .25842 .22571 .19715 .17220 .15040 .13137 .14864 .12285 .10153 .08391 .06934 05731 .18394 .15770 .13520 11591 .10367 08264 .06588 .05252 04187 26 28 36069 33348 30832 21981 .19583 30 .17411 .09938 03338 .01510 TABLE 9-4 Present Value of Annuity of $1 (N) Periods 2% 3% 4% 5% 6% 7% 8% 10% 12% 15% 1 .98039 .97087 .96154 .92593 .90909 .86957 2 1.94156 1.91347 2.82861 89286 1.69005 2.40183 3 .94340 1.83339 2.67301 3.46511 4.21236 4 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 3.71710 4.57971 1.73554 2.48685 3.16987 3.79076 .93458 1.80802 2.62432 3.38721 4.10020 4.76654 5.38929 1.78326 2.57710 3.31213 3.99271 4.62288 5.20637 2.88388 3.80773 4.71346 5.60143 6.47199 7.32548 8.16224 8.98259 9.78685 5 6 .95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 8.30641 8.86325 9.39357 5.41719 6.23028 4.91732 5.58238 7 8 4.35526 4.86842 5.33493 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 5.93770 7.01969 5.97130 5.74664 9 6.24689 7.78611 8.53020 6.73274 7.43533 8.11090 8.76048 6.51523 7.02358 10 6.71008 5.75902 6.14457 6.49506 11 9.25262 7.49867 5.23371 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 7.13896 7.53608 12 10.57534 6.19437 7.94269 8.35765 6.81369 7.10336 13 9.38507 9.98565 10.56312 11.34837 7.90378 9.95400 10.63496 11.29607 11.93794 6.42355 5.42062 5.58315 5.72448 14 9.89864 7.36669 6.62817 15 11.11839 7.60608 6.81086 12.10625 12.84926 13.57771 14.29187 16 7.82371 8.24424 8.55948 8.85137 9.12164 9.37189 12.56110 13.16612 13.75351 11.65230 12.16567 6.97399 7.11963 17 18 7.24967 14.99203 15.67846 12.65930 13.13394 13.59033 19 8.02155 8.20141 8.36492 8.51356 7.36578 20 8.74547 9.10791 9.44665 9.76322 10.05909 10.33560 10.59401 11.06124 11.46933 11.82578 12.13711 12.40904 10.37966 10.83777 11.27407 11.68959 12.08532 12.46221 13.16300 13.79864 14.37519 14.89813 15.37245 7.46944 16.35143 17.65805 18.91393 10.10590 10.47726 10.82760 11.15812 11.46992 12.04158 12.55036 13.00317 13.40616 13.76483 14.32380 14.87747 15.93692 16.93554 17.87684 18.76411 19.60044 9.60360 9.81815 10.20074 10.52876 22 5.84737 5.95423 6.04716 6.12797 6.19823 6.25933 6.35866 6.43377 6.49056 6.53351 6.56598 8.77154 7.64465 24 8.98474 26 20.12104 21.28127 14.45112 15.24696 15.98277 16.66306 17.29203 10.80998 11.05108 11.25778 28 7.78432 7.89566 7.98442 8.05518 9.16095 9.30657 9.42691 30 22.39646