Problem 1:

Problem 2:

Need help with problem 1 and 2, just where the x's are. Thank you

Issue Price Youngblood Enterprises plans to issue $450,000 face value bonds with a stated interest rate of 10%. They will mature in 6 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%. Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. Due to differences in rounding when using the present value factors, you need to round your answer for the ISSUE PRICE in the first column only to the nearest 100. Market Rate 10% 8% 12% 1. What is the amount due at maturity? $ 450,000 450,000 $ 450,000 2. How much cash interest will be paid every six months? $ 22,500 22,500 $ 22,500 3. At what price will the bond be issued? $ 450,000 $ 492,233 x $ 412,272 X Feedback Check My Work 1) Face value of the bonds is the maturity amount of the bonds as indicated on the face of the bond contract. 2) Face rate of interest is the amount of interest that will be paid on the bonds as indicated in the bond contract. 3) n = periods, i = annual market rate of interest/periods per year. Bonds typically pay interest twice a year. Issue Price The following terms relate to independent bond issues: a. 580 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments b. 580 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments c. 900 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments d. 2,150 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue $ 536,025 b. 535,212 c. $ 787,841 d. 1,044,123 Feedback Check My Work 1) Face value of the bonds is the maturity amount of the bonds as indicated on the face of the bond contract. 2) Face rate of interest is the amount of interest that will be paid on the bonds as indicated in the bond contract. 3) n = periods, i = annual market rate of interest/periods per year. Bonds typically pay interest twice a year