On December 31, 2021, Interlink Communications issued 8% stated rate bonds with a face amount of $109 million. The bonds mature n December 31, 2051. Interest is payable annually on each December 31, beginning in 2022. (FV of $1, PV of $1. FVA of $1, PVA of $1. VAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) etermine the price of the bonds on December 31, 2021, assuming that the market rate of interest for similar bonds was 9%. (Round our final answers to nearest whole dollar amount.)
On December 31, 2021, Interlink Communications issued 8% stated rate bonds with a face amount of $109 million. The bonds mature n December 31, 2051. Interest is payable annually on each December 31, beginning in 2022. (FV of $1, PV of $1. FVA of $1, PVA of $1. VAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) etermine the price of the bonds on December 31, 2021, assuming that the market rate of interest for similar bonds was 9%. (Round our final answers to nearest whole dollar amount.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 31, 2021, Interlink Communications issued 8% stated rate bonds with a face amount of $109 million. The bonds mature
on December 31, 2051. Interest is payable annually on each December 31, beginning in 2022. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Determine the price of the bonds on December 31, 2021, assuming that the market rate of interest for similar bonds was 9%. (Round
your final answers to nearest whole dollar amount.)
Table values are based on:
n =
Cash Flow
Amount
Present Value
Interest
Principal
Price of bonds
Expert Solution
Step 1
| n= | 30 years |
| i= | 9% |
| Cashflow | Amount | Present value factor@9% | Present value |
| Interest |
8.72$ (109$ million*8%) |
10.2737 | $89.59 |
| Principal | $109 million | 0.0754 | $8.22 |
| Price of bonds | $97.80 |
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