QS 14-5A Computing bond price LO C2

Garcia Company issues 9.00%, 15-year bonds with a par value of $200,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8.00%, which implies a selling price of 108 3/5. Confirm that the bonds selling price is approximately correct. Use present value Table B.1 and Table B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations. Round your other final answers to nearest whole dollar amount.)

QS 14-5A Computing bond price LO C2 Garcia Company issues 9.00%, 15-year bonds with a par value of $200,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8.00%, which implies a selling price of 108 3/5. Confirm that the bonds' selling price is approximately correct. Use present value Table B.1 and Table B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations. Round your other final answers to nearest whole dollar amount.) Par Value x Price Selling Price $ 200,000 108 3/5 = $ 217,200 Cash Flow Table Value Present Value $200,000 par (maturity) value $9,000 interest payment Price of Bond Difference due to rounding of table values