The following terms relate to independent bond issues:

640 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments

640 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments

860 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments

1,990 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
a.
b.
c.
d.

Feedback Area

Feedback

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.