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ServiceMaster Company issues $100,000 in bonds, due in five years with 9 percent interest payable semi-annually at year-end. At the time of issue, the market

ServiceMaster Company issues $100,000 in bonds, due in five years with 9 percent interest payable semi-annually at year-end. At the time of issue, the market rate for such bonds is 11 percent.

(1) principal:

(2) interest payment per 6-months:

Q. What is the value (issue price) of these bonds?

Present value of the principal:

Present value of the interest payments:

Present value (selling price) of the bonds :

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