Moss Co. issued $790,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.
Moss Co. issued $790,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Moss Co. issued $790,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%.
Determine the present
Transcribed Image Text:Exhibit 7 Present Value of an Annuity of $1 at Compound Interest
Periods 4%
5½%
0.94787
1
0.96154
2
1.88609
1.84632
3
2.77509
2.69793
4
3.62990
3.58753
4.45182 4.38998
5
6%
0.94340
1.83339
2.67301
3.54595 3.50515 3.46511
4.32948 4.27028 4.21236
5.24214 5.15787 5.07569 4.99553 4.91 732
6.00205 5.89270 5.78637 5.68297 5.58238
6.73274 6.59589 6.46321 6.33457 6.20979
7.43533 7.26879 7.10782 6.95220 6.80169
8.11090 7.91272 7.72173 7.53763 7.36009
6
7
8
9
10
4½%
5%
0.95694 0.95238
1.85941
1.87267
2.74896 2.72325
13%
10%
11% 12%
0.90909 0.90090 0.89286
6½%
7%
0.93897 0.93458
0.88496
1.82063 1.80802 1.73554 1.71252 1.69005 1.66810
2.64848 2.62432 2.48685 2.44371 2.40183 2.36115
3.42580 3.38721 3.16987 3.10245 3.03735 2.97447
4.15568 4.10020 3.79079 3.69590 3.60478 3.51723
4.84101 4.76654 4.35526 4.23054 4.11141 3.99755
5.48452 5.38929 4.86842 4.71220 4.56376 4.42261
6.08875 5.97130 5.33493 5.14612 4.96764 4.79677
6.65610 6.51523 5.75902 5.53705 5.32825 5.13166
7.18883 7.02358 6.14457 5.88923
5.65022 5.42624
O
Transcribed Image Text:Periods 4%
1
2
3
4
5
6
7
8
9
10
Exhibit 5 Present Value of $1 at Compound Interest
13%
0.88496
0.78315
0.69305
0.65873 0.63552 0.61332
0.59345 0.56743 0.54276
0.53464 0.50663 0.48032
0.48166 0.45235 0.42506
0.43393 0.40388 0.37616
0.36061 0.33288
0.29459
0.35218 0.32197
4½2%
5%
11% 12%
0.90090 0.89286
0.96154
5½% 6% 6½% 7%
10%
0.956940 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909
0.92456 0.915730 0.90703 0.89845 0.89000 0.88166 0.87344 0.82645 0.81162 0.79719
0.88900 0.876300 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.73119 0.71178
0.85480 0.838560 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301
0.82193 0.802450 0.78353 0.76513 0.74726 0.72988 0.71299 0.62092
0.79031 0.767900 0.74622 0.72525 0.70496 0.68533 0.66634 0.56447
0.71068 0.68744 0.66506 0.64351 0.62275 0.51316
0.73069 0.703190 0.67684 0.65160 0.62741 0.60423 0.58201 0.46651
0.70259 0.672900 0.64461 0.61763 0.59190 0.56735
0.67556 0.643930 0.61391 0.58543 0.55839 0.53273
0.75992 0.734830
0.54393 0.42410 0.39092
0.50835 0.38554
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