On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 3 years. The contract rate is 4%, and interest is paid semiannually on June 30 and December 31. The market rate is 5%. Using the present value factors below, the issue (selling) price of the bonds is:

n=		i=			Present Value of an Annuity			Present value of $1
3		4.0	%			2.7751		0.8890
6		2.0	%			5.6014		0.8880
3		5.0	%			2.7232		0.8638
6		2.5	%			5.5081		0.8623

Multiple Choice

$205,607.

$194,492.

$200,000.

$22,032.

$172,460.