On January 1, 2024, Tropical World issues $40.5 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.

Required: 1-a. If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 1-b. Will the bonds issue at face amount, a discount, or a premium?

Face amount	$40,500,000
interest payment
number of periods
market interest rate
issue price

2-a. If the market rate is 7%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium?

Face amount	$40,500,000
interest payment
number of periods
market interest rate
issue price

3-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 3-b. Will the bonds issue at face amount, a discount, or a premium?

Face amount	$40,500,000
interest payment
number of period
market interest rate
issue price

Present Value of an Ordinary Annuity of $1 PVA=[1-1/(1+i)n]/i Page 1 of 2 ZOOM + n/i 1.00% To Calculate Present value of Interest Payment 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 7.00% 8.00% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.93458 0.92593 9.00% 0.91743 10.00% 11.00% 12.00% 20.00% 2 3 3353 0.90909 1.97040 0.90090 0.89286 1.95588 0.83333 1.94156 1.92742 1.91347 1.89969 1.88609 1.87267 1.85941 1.84632 1.83339 1.80802 1.78326 2.94099 1.75 11 1.73554 1.71252 1.69005 1.52778 2.91220 2.88388 2.85602 2.82861 2.80164 2.77509 2.74896 2.72325 2.69793 2.67301 2.62432 2.57710 2.53129 2.48685 2.44371 2.40183 4 3.90197 2.10648 3.85438 3.80773 3.76197 3.71710 3.67308 3.62990 3.58753 3.54595 3.50515 3.46511 3.38721 3.31213 3.23972 3.16987 3.10245 3.03735 2.58873 5 4.85343 4.78264 4.71346 4.64583 4.57971 4.51505 4.45182 4.38998 4.32948 4.27028 4.21236 4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 2.99061 6 5.79548 5.69719 5.60143 5.50813 5.41719 5.32855 5.24214 5.15787 5.07569 4.99553 4.91732 4.76654 4.62288 4.48592 7 6.72819 6.59821 6.47199 6.34939 6.23028 6.11454 6.00205 5.89270 5.78637 5.68297 5.58238 5.38929 5.20637 5.03295 8 7.65168 7.48593 7.32548 7.17014 7.01969 6.87396 6.73274 6.59589 6.46321 6.33457 6.20979 5.97130 5.74664 5.53482 9 8.56602 8.36052 8.16224 7.97087 7.78611 7.60769 7.43533 7.26879 7.10782 6.95220 6.80169 10 9.47130 9.22218 8.98259 8.75206 8.53020 8.31661 8.11090 7.91272 7.72173 7.53763 7.36009 6.51523 6.24689 7.02358 6.71008 5.99525 4.35526 4.23054 4.86842 4.71220 5.33493 5.14612 4.96764 5.75902 5.53705 5.32825 4.03097 6.41766 6.14457 5.88923 5.65022 4.19247 4.11141 3.32551 4.56376 3.60459 3.83716 11 12 13 14 15 234NE 10.36763 13.00370 12.54338 13.86505 13.34323 10.07112 9.78685 9.51421 9.25262 9.00155 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 12.13374 11.73153 11.34837 10.98318 10.63496 10.30274 12.10625 11.69091 11.29607 10.92052 12.84926 12.38138 11.93794 11.51741 11.11839 8.76048 8.52892 8.30641 8.09254 7.88687 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 4.32706 9.38507 9.11858 8.86325 8.61852 8.38384 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 4.43922 9.98565 9.68285 9.39357 9.11708 8.85268 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 4.53268 10.56312 10.22283 9.89864 9.58965 9.29498 8.74547 8.24424 7.78615 7.36669 6.98187 6.62817 4.61057 10.73955 10.37966 10.03758 9.71225 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 4.67547 16 17 18 16.39827 19 17.22601 20 18.04555 25 30 40 14.71787 14.13126 13.57771 13.05500 12.56110 12.09412 11.65230 11.23402 10.83777 10.46216 10.10590 15.56225 14.90765 14.29187 13.71220 13.16612 12.65132 12.16567 11.70719 11.27407 10.86461 10.47726 15.67256 14.99203 14.35336 13.75351 13.18968 12.65930 12.15999 11.68959 11.24607 10.82760 16.42617 15.67846 14.97889 14.32380 13.70984 13.13394 12.59329 12.08532 11.60765 11.15812 10.33560 17.16864 16.35143 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.95038 11.46992 10.59401 22.02316 20.71961 19.52346 18.42438 17.41315 16.48151 15.62208 14.82821 14.09394 13.41393 12.78336 11.65358 10.67478 25.80771 24.01584 22.39646 20.93029 19.60044 18.39205 17.29203 16.28889 15.37245 14.53375 13.76483 12.40904 11.25778 10.27365 32.83469 29.91585 27.35548 25.10278 23.11477 21.35507 19.79277 18.40158 17.15909 16.04612 15.04630 13.33171 11.92461 10.75736 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 4.72956 9.76322 9.12164 8.54363 8.02155 7.54879 7.11963 4.77463 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 4.81219 9.60360 8.95011 8.36492 7.83929 7.36578 4.84350 9.81815 9.12855 8.51356 7.96333 7.46944 4.86958 9.82258 9.07704 8.42174 7.84314 4.94759 9.42691 8.69379 8.05518 4.97894 9.77905 8.95105 8.24378 4.99660 DELL