QS 10-16A Computing bond price LO C2 Compute the selling price of 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. The annual market rate for these bonds is 8%. Use present value Table Bi and Table 8.3 In Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations.) Table Value Present Value Cash Flow $240,000 par (maturity) value 512,000 interest payment Price of Bond B-10 Appendix B Time Value of Money TABLE B.1" Present Value of 1 p=1/(1+1 Rate Periods 1% 2% 3% 45 5% 15% 7 10% 12% 6% Periods 1 1 2 3 4 3 4 5 6 7 8 9 10 0.9901 0.9803 0.9706 0.9610 0.9515 0.9420 0.9327 0.9235 0.9143 0.9053 0.8963 0.8874 0.8787 0.8700 0.8613 0.8528 0.8444 0.8360 0.8277 0.8195 0.7798 0.7419 0.7059 0.6717 5 6 7 8 9 TO 11 12 13 14 15 16 17 18 19 20 25 30 35 40 09804 0.9709 0.9612 0.9426 0.9423 0.9151 0.9238 0.8885 0.9057 0.8626 0.8880 0.8375 0.8705 0.8131 0.8535 0.7094 0.8368 0.7664 0.8203 0.7441 0.8043 0.7224 0.7885 0.7014 0.7730 0.6810 0.7579 0.6611 0.7430 0.6419 0.7284 0.6232 0.7142 0.6050 0.7002 0.5874 0.6864 0.5703 0.6730 0.5537 0.6095 0.4776 0.5521 0.4120 0.5000 0.3554 0.4529 0.3066 0.9615 0.9246 0.8890 0.8548 0.8219 0.7903 0.7599 0.7307 0.2026 0.6756 0.6496 0.6246 0.6006 0.5775 0.5553 0.5339 0.5134 0.4936 0.4746 0.4564 0.3751 0.3083 0.2534 0.2083 0.9524 0.9070 0.3638 0.8227 0.7835 0.7462 0.7107 0.6768 0.5446 0.6139 0.5847 0.5568 0.5303 0.5051 0.4810 0.4581 0.4363 0.4155 0.3957 0.3769 0.2953 0.2314 0.1813 0.1420 0.9434 0.8900 0.8396 0.7921 0.7473 0.7050 0.6651 0.6274 0.5919 0.5504 05268 0.4970 0.4688 0.4423 0.4173 0.3936 0.3714 0.3503 0.3305 0.3118 0.2330 0.1741 0.1301 0.0972 0.9346 08734 0.8163 0.7629 0.7130 0.6663 0.6227 05820 0.5439 0.5083 0.4751 0.4440 0.4150 0.3879 0.3624 0.3387 0.3166 0.2959 0.2765 0.2584 0.1842 0.1314 0.0937 0.0668 0.9259 0.8573 0.7938 0,7350 0.GBOG 0.6302 0935 05403 0.6002 0.4632 0.4289 0.3971 0.3677 0.3405 0.3152 0.2919 0.2703 0.2502 0.2317 02145 0.1460 0.0994 0.0676 0.0460 0.9174 0.8417 0.7722 0.7084 0.5499 0.5969 0.5470 0.5019 0.4004 0.4224 0.3875 0.3555 0.3262 0.2992 0.2745 0.2519 0.2311 0.2120 0.1945 0.1784 0.1160 0.0754 0.0490 0.0318 0.9091 0.8929 0.8264 0.7972 0.7513 0.7118 0.6830 0.6355 0.6209 0.5674 0.5645 0.5066 0.5132 0.4523 0.4065 0.4039 0.4241 0.3606 0.3855 0.3220 0.3505 0.2875 0,3186 0.2567 0.2897 0.2292 0.2633 02046 0.2394 0.1827 0.2176 0.1631 0.1978 0.1456 0.1799 0.1300 0.1635 0.1161 0.1486 0.1037 0.0923 0.0588 0.0573 0.0334 0.0356 0.0189 0.0221 0.0107 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.2149 0.1860 0.1625 0.1413 0.1229 0 1069 0.0929 0.0808 0.0703 0.0611 0.0304 0.0151 0.0075 0.0037 12 13 14 16 17 18 19 20 25 30 35 40 *Used to compute the present value of a known future amount. For example: How much would you need to invest lay at 10 comprended semiannually to accumulate 5.000 in 6 years from today! Using the factors of a 12 and/-5% (12 semiannual periods and a semiannual rate of the factor is 0.5568. You would need to invest 52,784 today (55.000 x 0.5308) f = (1 + i)" TABLE B.2 Appendo B Time Value of Morvey B-11 P = 1 = 1 (1 + 7)" 17 TABLE B.31 Present Value of an Annuity of 1 Rate 6% Periods 1% 2 3 4% 5% 7% 8% 9. 10N 12% 15% Periods 1 2 3 4 5 G 7 8 0.9901 1.9704 2.9410 3.9020 4,8534 5.7955 6.7282 7.6517 8.5660 9.4713 10.3676 11.2551 12.1337 13.0037 13.8651 14,7179 15.5623 16.3983 17.2260 18.0456 22.0232 25.8077 29.4086 32.8347 1 2 3 4 5 6 7 8 9 10 11 12 12 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40 0.9804 0.9709 1.9416 19135 2.8839 2.8286 3.8072 3.7171 4.7135 4.5797 5.6014 5.4172 6.4720 62303 7.3255 7.0197 8.1622 7,706 8.9820 8.5302 7868 9.2920 10,5753 9.9540 11.3484 10.6350 12.1062 11.2961 12.8493 11.9379 13.5777 12.5611 14.2919 13.1661 14.9920 13.7535 15.6785 14.3238 16.3514 14.8775 19.5235 17.4131 22.3965 19.6004 24.9986 21.4872 27.3555 23.1148 0.9615 1.8861 2.7751 3,6299 4,4513 5.2421 6.0021 0.7327 1:45 81105 1760 9.30 99850 10.5631 11.1184 11.6523 12.1657 12.6593 13.1339 13.5903 15.6221 17.2920 18.6646 19.7928 0.9524 1.8594 2.7232 3.5450 43295 5.0757 57854 032 1078 17217 2014 633 9.935 9.8986 10,3797 10.8378 11.2741 11.6896 12.0853 12.4622 14.0939 15.3725 16.3742 17.1591 0.9434 0.9346 1.8334 1.8080 2.6730 2.6243 3.4651 33872 4.2124 4.1002 4.9173 4.7665 5.5824 5.3893 5.2098 5.9713 58017 6.5152 7.3601 7.0236 7859 7.4987 83838 7.9427 8,0527 8.3527 9.2950 8.7455 9.7122 9.1079 10.1059 9.4466 10.4773 9.7632 10.8276 10.0591 11.1581 10.3356 11.4699 10.5940 12.7834 11.6536 13.7648 12.4090 14.4982 12.9477 15.0463 13.3317 0.9259 1,7833 25771 3.3121 3.9927 4,6229 5.2014 5.7466 6.2469 6.7101 7.1390 7.5361 7.9938 8.2442 3.5595 8.8514 9.1216 9.3719 9.6036 9.8181 10.6748 11.2578 11.6546 11.9246 0.9174 0.9091 0.8929 0.8695 1.7591 1.7355 1.6901 1.6257 2.5313 2.4869 2.4018 2.2832 3.2397 3.1699 3.0373 2.8550 3.8897 3.7908 3.6048 3,3522 4.48594.3553 4.1114 3.7845 5.0330 4.8684 45638 4.1604 5,5348 5.3349 4.9676 44873 5.9952 5.7590 5.3282 4.7716 6.4177 6.1446 5.6502 5.0188 6.8052 6.4951 5.9377 5.2337 7.1607 6,8137 6.1944 5.4206 2.486971014 6.4235 55831 7.786273667 6.6282 5.7245 8.0607 7.6061 6.8109 5.8474 8.3126 78237 6.9740 5.9542 8.5436 8.0216 7.1196 60472 8.7556 8.2014 7.2497 6:1280 8.9501 8 3649 7.3658 6.1982 9.1285 8.5136 7.4694 6.2593 9.8226 9.0770 78431 6.4641 10.2737 9.4269 8.0552 6.5660 10.5668 9.6442 8.1755 6.6166 10.7574 9.7791 8.2438 6.6418 15 16 17 19 20 25 30 35 40 Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the present value of $2.000 per year for 10 years singum annual interest rate of 97 For ( 10,1 =9), the PV factor is 6,4177 $2,000 per year for 10 years is the equivalent of $19.835 today (52.000 x 6.4177 TABLE B.49 Anmol