Issue Price The following terms relate to independent bond issues: 460 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 460 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 890 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 1,960 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.
Issue Price The following terms relate to independent bond issues: 460 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 460 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 890 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 1,960 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Issue Price
The following terms relate to independent bond issues:
- 460 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments
- 460 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments
- 890 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments
- 1,960 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. | $ |
Transcribed Image Text:TABLE 9-2 Present Value of $1
(N)
Periods
15%
2%
3%
4%
5%
6%
7%
8%
10%
12%
1
98039
97087
.96154
.95238
94340
.93458
.92593
.90909
.89286
86957
2
96117
.94260
.92456
.90703
.89000
.87344
.85734
.82645
.79719
.75614
3
94232
.91514
.88900
.86384
.83962
.81630
.79383
.75131
.71178
.65752
4
.92385
.88849
.85480
.82270
.79209
.76290
.73503
.68301
.63552
57175
.90573
.86261
.82193
.78353
74726
.71299
.68058
.62092
56743
49718
6
88797
.83748
.79031
.74622
.70496
.66634
.63017
.56447
50663
43233
7
.87056
.81309
.75992
.71068
.66506
.62275
58349
51316
.45235
37594
8
.85349
.78941
.73069
.67684
.62741
.58201
.54027
.46651
.40388
32690
.83676
.76642
.70259
.64461
.59190
.54393
50025
.42410
.36061
28426
10
82035
.74409
.67556
.61391
.55839
.50835
.46319
.38554
.32197
24718
11
.80426
.72242
.64958
58468
.52679
.47509
.42888
.35049
.28748
21494
12
.78849
.70138
.62480
55684
49697
.44401
.39711
.31863
.25668
.18691
13
.77303
.68095
.60057
53032
46884
.41496
.36770
.28966
.22917
.16253
14
.75788
.66112
.57748
.50507
44230
.38782
.34046
.26333
.20462
.14133
15
.74301
.64186
.55526
48102
41727
.36245
.31524
.23939
.18270
.12289
16
.72845
.62317
.53391
45811
39365
.33873
.29189
.21763
.16312
.10686
17
.71416
.60502
.51337
43630
37136
.31657
.27027
.19784
.14564
.09293
18
.70016
.58739
49363
41552
35034
.29586
.25025
.17986
.13004
.08081
19
.68643
.57029
47464
.39573
.33051
.27651
.23171
.16351
.11611
.07027
20
.67297
55368
45639
.37689
31180
.25842
.21455
.14864
.10367
.06110
22
.64684
.52189
42196
.34185
27751
.22571
.18394
.12285
.08264
.04620
24
.62172
49193
.39012
31007
24698
.19715
.15770
.10153
.06588
.03493
26
59758
46369
.36069
28124
21981
.17220
.13520
.08391
.05252
.02642
28
.57437
43708
33348
25509
.19583
.15040
.11591
.06934
.04187
.01997
30
55207
41199
.30832
23138
.17411
.13137
.09938
.05731
.03338
.01510
Transcribed Image Text:TABLE 9-4 Present Value of Annuity of $1
(N)
Periods
3%
2%
4%
5%
6%
7%
8%
10%
12%
15%
1
98039
97087
.96154
.95238
.94340
.93458
.92593
.90909
.89286
86957
2
1.94156
1.91347
1.88609
1.85941
1.83339
1.80802
1.78326
1.73554
1.69005
1.62571
3
2.88388
2.82861
2.77509
2.72325
2.67301
2.62432
2.57710
2.48685
2.40183
2.28323
4
3.80773
3.71710
3.62990
3.54595
3.46511
3.38721
3.31213
3.16987
3.03735
2.85498
4.71346
4.57971
4.45182
4.32948
4.21236
4.10020
3.99271
3.79076
3.60478
3.35216
5.60143
5.41719
5.24214
5.07569
4.91732
4.76654
4.62288
4.35526
4.11141
3.78448
7
6.47199
6.23028
6.00205
5.78637
5.58238
5.38929
5.20637
4.86842
4.56376
4.16042
8.
7.32548
7.01969
6.73274
6.46321
6.20979
5.97130
5.74664
5.33493
4.96764
4.48732
9.
8.16224
7.78611
7.43533
7.10782
6.80169
6.51523
6.24689
5.75902
5.32825
4.77158
10
8.98259
8.53020
8.11090
7.72173
7.36009
7.02358
6.71008
6.14457
5.65022
5.01877
11
9.78685
9.25262
8.76048
8.30641
7.88687
7.49867
7.13896
6.49506
5.93770
5.23371
12
10.57534
9.95400
9.38507
8.86325
8.38384
7.94269
7.53608
6.81369
6.19437
5.42062
13
11.34837
10.63496
9.98565
9.39357
8.85268
8.35765
7.90378
7.10336
6.42355
5.58315
14
12.10625
11.29607
10.56312
9.89864
9.29498
8.74547
8.24424
7.36669
6.62817
5.72448
15
12.84926
11.93794
11.11839
10.37966
9.71225
9.10791
8.55948
7.60608
6.81086
5.84737
16
13.57771
12.56110
11.65230
10.83777
10.10590
9.44665
8.85137
7.82371
6.97399
5.95423
17
14.29187
13.16612
12.16567
11.27407
10.47726
9.76322
9.12164
8.02155
7.11963
6.04716
18
14.99203
13.75351
12.65930
11.68959
10.82760
10.05909
9.37189
8.20141
7.24967
6.12797
19
15.67846
14.32380
13.13394
12.08532
11.15812
10.33560
9.60360
8.36492
7.36578
6.19823
20
16.35143
14.87747
13.59033
12.46221
11.46992
10.59401
9.81815
8.51356
7.46944
6.25933
22
17.65805
15.93692
14.45112
13.16300
12.04158
11.06124
10.20074
8.77154
7.64465
6.35866
24
18.91393
16.93554
15.24696
13.79864
12.55036
11.46933
10.52876
8.98474
7.78432
6.43377
26
20.12104
17.87684
15.98277
14.37519
13.00317
11.82578
10.80998
9.16095
7.89566
6.49056
28
21.28127
18.76411
16.66306
14.89813
13.40616
12.13711
11.05108
9.30657
7.98442
6.53351
30
22.39646
19.60044
17.29203
15.37245
13.76483
12.40904
11.25778
9.42691
8.05518
6.56598
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