Question
On January 1, 2021, Frontier World issues $39.9 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December
On January 1, 2021, Frontier World issues $39.9 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year.
If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1).
- Do not round interest rate factors.
- Enter your answers in dollars not in millions.
- Round "Market interest rate" to 1 decimal place.
- Round your final answers to the nearest whole dollar.
I have the numbers calculated out (please verify), but how do I get the issue price? Was there a table I need to use?
Face Amount: 39,900,000
Interest Payment: 1,396,500
Periods to maturity: 20
Market Interest Rate: 3%
Issue price: ????
The bonds will issue at: (Discount, Premium, or Face Amount?)
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