Midland Oil has $1,000 par value bonds outstanding at 18 percent interest. The bonds will mature in 25 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the present yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) Bond Price a. 10 percent b. 11 percent C. 15 percent Appendix B Present value of $1, PV Period 1% 2% 1 0.990 0.980 2 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 0.942 0.888 0.933 0.871 0.923 0.853 0.914 0.837 0.905 0.820 0.896 0.804 0.887 0.788 0.879 0.773 0.870 0.758 0.861 0.743 0.853 0.728 0.844 0.714 0.836 0.700 0.828 0.686 0.820 0.673 0.780 0.610 0.742 0.552 0.672 0.453 0.608 0.372 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 PV = FV F 1 [(1+1)^ 3% 4% 0.971 0.962 0.943 0.925 0.915 0.889 0.888 0.855 0.863 0.822 0.837 0.790 0.813 0.760 0.789 0.731 0.766 0.703 0.744 0.676 0.722 0.650 0.701 0.625 0.681 0.601 0.661 0.577 0.642 0.555 0.623 0.534 0.605 0.513 0.587 0.494 0.570 0.475 0.554 0.456 0.478 0.375 0.412 0.308 0.307 0.208 0.228 0.141 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 0.142 0.087 Percent 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 0.054 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 0.067 0.034 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.146 0.099 0.046 0.021 9% 10% 0.917 0.909 0.842 0.826 0.772 0.751 0.708 0.683 0.650 0.621 0.596 0.564 0.547 0.513 0.502 0.467 0.460 0.424 0.422 0.386 0.388 0.350 0.356 0.319 0.326 0.290 0.299 0.263 0.275 0.239 0.252 0.218 0.231 0.198 0.212 0.180 0.194 0.164 0.178 0.149 0.116 0.092 0.075 0.057 0.032 0.022 0.013 0.009 11% 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 0.074 0.044 0.015 0.005 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 0.011 0.003 Appendix B (concluded) Present value of $1 Percent Period 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 13% 0.885 0.877 1 0.870 0.862 0.855 0.847 0.840 0.833 0.800 0.769 0.741 0.714 2 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.640 0.592 0.549 0.510 3 0.693 0.675 0.658 0.641 0.624 0.593 0.579 0.512 0.455 0.406 0.364 0.609 0.515 0.499 0.482 0.410 0.350 4 0.613 0.592 0.572 0.552 0.534 0.301 0.260 5 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.223 0.186 0.328 0.269 0.262 0.207 6 0.480 0.456 0.432 0.370 0.352 0.335 0.165 0.133 0.410 0.390 0.354 0.333 0.314 0.296 7 0.425 0.400 0.376 0.279 0.210 0.159 0.122 0.095 8 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.168 0.068 0.123 0.091 9 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.048 0.194 0.134 0.094 0.067 0.295 0.270 0.247 0.208 0.191 0.176 0.162 0.107 0.073 0.050 0.035 0.227 0.195 0.178 0.261 0.237 0.215 0.162 0.148 0.135 0.086 0.056 0.037 0.025 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.069 0.043 0.027 0.018 0.204 0.182 0.163 0.145 0.104 0.093 0.055 0.033 0.020 0.013 0.130 0.125 0.111 0.116 0.099 0.181 0.160 0.141 0.088 0.078 0.044 0.025 0.015 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.035 0.020 0.011 0.009 0.006 0.005 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.028 0.015 0.008 0.080 0.069 0.060 0.052 0.045 0.023 0.012 0.006 0.003 0.125 0.108 0.093 0.095 0.081 0.083 0.111 0.044 0.018 0.009 0.005 0.002 0.069 0.070 0.060 0.051 0.059 0.051 0.043 0.038 0.037 0.031 0.014 0.098 0.007 0.003 0.002 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.012 0.005 0.002 0.001 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.004 0.001 0.001 0 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.001 0 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0 0 0.002 0.001 0.001 0.001 0 0 0 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 00 50% 0.667 0.444 0.296 0.198 0.132 0.088 0.059 0.039 0.026 0.017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 oooooo d dd000 Appendix D Present value of an annuity of $1, PVIFA PV=A 1- 1 (1 + i) Period 1% 2% 3% 4% 5% 1 0.990 0.980 0.971 0.962 0.952 2 1.970 1.942 1.913 1.886 1.859 2.941 2.884 2.829 2.775 2.723 3.808 3.717 3.630 3.546 3.902 4.853 4.713 4.580 4.452 4.329 5.795 5.601 5.417 5.242 5.076 6.728 6.472 6.230 6.002 5.786 7.652 7.325 7.020 6.733 6.463 8.566 8.162 7.786 7.435 7.108 9.471 8.983 8.530 8.111 7.722 10.368 9.787 9.253 8.760 8.306 11.255 10.575 9.954 9.385 8.863 12.134 11.348 10.635 9.986 9.394 13.004 12.106 11.296 10.563 9.899 13.865 12.849 11.938 11.118 10.380 14.718 13.578 15.562 12.561 13.166 14.992 13.754 14.292 16.398 17.226 15.678 14.324 14.877 18.046 16.351 22.023 19.523 25.808 22.396 19.600 17.413 32.835 27.355 23.115 39.196 31.424 - - 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 Percent 6% 7% 0.943 0.935 1.833 1.808 2.673 2.624 3.465 3.387 4.212 4.100 4.917 4.767 5.582 5.389 6.210 5.971 6.802 6.515 7.024 7.887 7.499 8.384 7.943 8.853 8.358 9.295 8.745 9.712 9.108 10.106 9.447 11.652 10.838 12.166 11.274 10.477 12.659 11.690 10.828 10.059 9.763 13.134 12.085 11.158 10.336 13.590 12.462 11.470 10.594 15.622 14.094 12.783 11.654 17.292 15.372 13.765 12.409 19.793 17.159 15.046 13.332 25.730 21.482 18.256 15.762 13.801 8% 9% 10% 11% 12% 0.926 0.917 0.909 0.901 0.893 1.783 1.759 1.736 1.713 1.690 2.577 2.531 2.487 2.444 2.402 3.312 3.240 3.170 3.102 3.037 3.993 3.890 3.791 3.696 3.605 4.623 4.486 4.355 4.231 4.111 5.206 5.033 4.868 4.712 4.564 5.747 5.535 5.335 5.146 4.968 6.247 5.995 5.759 5.537 5.328 6.71 6.4 6.145 5.88 5.650 7.139 6.805 6.495 6.207 5.938 7.536 7.161 6.814 6.492 6.194 7.904 7.487 7.103 6.750 6.424 8.244 7.786 7.367 6.982 6.628 8.559 8.061 7.606 7.191 6.811 8.851 8.313 7.824 7.379 6.974 9.122 8.544 8.022 7.549 7.120 9.372 8.756 8.201 7.702 7.250 9.604 8.950 8.365 7.839 7.366 9.818 9.129 8.514 7.963 7.469 10.675 9.823 7.843 11.258 10.274 9.077 8.422 8.694 8.951 9.427 11.925 10.757 9.779 12.233 10.962 9.915 8.055 8.244 9.042 8.304 Appendix D (concluded) Present value of an annuity of $1 Percent Period 13% 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 1 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.800 0.769 0.741 0.714 1.647 1.626 1.605 1.585 1.566 1.547 1.528 1.440 1.361 1.289 1.224 2.322 2.283 2.246 2.210 2.174 2.140 2.106 1.952 1.816 1.696 1.589 1.668 2.361 2.974 2.914 2.855 2.798 3.517 3.433 3.352 3.274 2.690 2.639 2.589 2.362 2.166 1.997 1.849 3.058 2.991 2.689 2.436 2.220 2.035 2.743 3.199 3.127 3.589 3.498 3.922 3.812 4.078 3.410 3.326 2.951 2.643 2.385 2.168 4.288 3.706 3.605 2.802 2.508 3.998 3.889 3.784 3.685 4.160 4.039 4.487 4.344 4.207 4.772 2.263 4.423 4.799 4.639 3.161 3.837 3.329 2.925 3.954 2.598 2.331 5.132 4.946 4.607 4.451 4.303 4.163 4.031 3.019 2.665 2.379 3.463 4.192 3.571 3.092 5.426 5.216 5.019 4.833 4.659 4.494 4.339 2.715 2.414 5.687 5.453 5.234 5.029 4.836 4.656 4.486 5.918 5.660 5.197 4.988 4.793 4.611 5.421 5.842 5.583 6.122 5.342 5.118 4.910 4.715 4.533 2.752 2.438 2.779 2.456 3.223 2.799 2.469 2.478 2.484 6.302 6.002 4.611 4.327 3.656 3.147 4.439 3.725 3.190 3.780 3.824 3.249 2.814 3.859 3.887 3.283 3.910 3.295 2.840 3.304 5.724 5.468 5.229 5.008 4.802 5.847 5.575 5.324 5.092 4.876 6.462 6.142 4.675 3.268 2.825 6.604 4.938 4.730 6.729 4.775 6.265 5.954 5.668 5.405 5.162 6.373 6.047 5.749 5.475 5.222 4.988 6.128 5.818 5.534 5.273 5.033 5.877 2.834 2.489 2.492 2.844 2.494 2.496 6.840 6.467 4.812 3.928 6.938 6.550 6.198 5.584 5.316 5.070 4.843 3.942 3.311 2.848 7.025 6.623 5.929 5.628 5.353 5.101 4.870 3.954 3.316 2.850 2.497 6.259 6.873 6.464 6.097 7.330 5.766 5.467 5.195 4.948 3.985 3.329 2.856 2.499 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 3.995 3.332 2.857 2.500 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 3.999 3.333 2.857 2.500 7.675 7.133 6.661 6.246 5.880 5.554 5.262 4.999 4.000 3.333 2.857 2.500 NATO IN MESSAG 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 50% 0.667 1.111 1.407 1.605 1.737 1.824 1.883 1.922 1.948 1.965 1.977 1.985 1.990 1.993 1.995 1.997 1.998 1.999 1.999 1.999 2.000 2.000 2.000 2.000