Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The face value of a bond is $67,000, its stated rate is 7%, and the term of the bond is five years. The bond pays

The face value of a bond is $67,000, its stated rate is 7%, and the term of the bond is five years. The bond pays interest semiannually. At the time of issue, the market rate is 8%.

Determine the present value of the bonds at issuance.

Present value of $1:

4%

5%

6%

7%

8%

5

0.822

0.784

0.747

0.713

0.681

6

0.790

0.746

0.705

0.666

0.630

7

0.760

0.711

0.665

0.623

0.583

8

0.731

0.677

0.627

0.582

0.540

9

0.703

0.645

0.592

0.544

0.500

10

0.676

0.614

0.558

0.508

0.463

Present value of ordinary annuity of $1:

4%

5%

6%

7%

8%

5

4.452

4.329

4.212

4.100

3.993

6

5.242

5.076

4.917

4.767

4.623

7

6.002

5.786

5.582

5.389

5.206

8

6.733

6.463

6.210

5.971

5.747

9

7.435

7.108

6.802

6.515

6.247

10

8.111

7.722

7.360

7.024

6.710

A. $19,020

B. $47,980

C. $64.312

D. $ 67,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

b. What groups were most represented? Why do you think this is so?

Answered: 1 week ago

Question

3. Describe phases of minority identity development.

Answered: 1 week ago

Question

5. Identify and describe nine social and cultural identities.

Answered: 1 week ago