On January 1, 2016, Gilbert Corporation purchased $1,000,000 face value, 6%, 20- year bonds of Richfield Inc. The bonds mature on January 1, 2036, and pay interest annually beginning January 1, 2017. Gilbert purchased the bonds to yield 8%. How much did Gilbert pay for the bonds?

Gilbert Corporation bought new equipment and agreed to pay for it in four equal annual installments of $10,000 beginning at the end of next year. Assuming that a prevailing interest rate of 10% applies to this contract, how much should Gilbert record as the cost of the equipment?

Gilbert Corporation purchased a special conveyor system on December 31, 2015. The purchase agreement stipulated that Gilbert should pay $50,000 at the time of purchase and $15,000 at the end of each of the next 5 years. The conveyor system should be recorded on December 31, 2015 at what amount, assuming an appropriate interest rate of 8%?

Gilbert Corporation wants to withdraw $100,000 (including principal) from an investment fund at the end of each year for 12 years. What should be the required initial investment at the beginning of the first year if the fund earns 9%?