On January 1, 2021, Saints issued $4,825,000, 6% 5-year bonds dated January 1, 2021. The bonds pay interest semiannually on June 30 and December 31. The bonds were issued to yield 4%. 2.0% 3.0% 4.0% 6.0% Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an ordinary annuity for 5 periods Present value of an ordinary annuity for 10 periods 0.90573 0.86261 0.82193 0.74726 0.82035 0.74409 0.67556 0.55839 4.71346 4.57971 4.45182 4.21236 8.98259 8.53020 8.11090 7.36009 Required: (1) Determine the following: Principal to be repaid: Semi-annual interest payments: n=_10 (2) Determine the cash proceeds from the bond issue.
On January 1, 2021, Saints issued $4,825,000, 6% 5-year bonds dated January 1, 2021. The bonds pay interest semiannually on June 30 and December 31. The bonds were issued to yield 4%. 2.0% 3.0% 4.0% 6.0% Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an ordinary annuity for 5 periods Present value of an ordinary annuity for 10 periods 0.90573 0.86261 0.82193 0.74726 0.82035 0.74409 0.67556 0.55839 4.71346 4.57971 4.45182 4.21236 8.98259 8.53020 8.11090 7.36009 Required: (1) Determine the following: Principal to be repaid: Semi-annual interest payments: n=_10 (2) Determine the cash proceeds from the bond issue.
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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Transcribed Image Text:On January 1, 2021, Saints issued $4,825,000, 6% 5-year bonds dated January 1, 2021. The bonds pay
interest semiannually on June 30 and December 31. The bonds were issued to yield 4%.
2.0%
3.0%
4.0%
6.0%
Present value of a single sum for 5 periods
Present value of a single sum for 10 periods
Present value of an ordinary annuity for 5 periods
Present value of an ordinary annuity for 10 periods
0.90573
0.86261
0.82193
0.74726
0.82035
0.74409
0.67556
0.55839
4.71346
4.57971
4.45182
4.21236
8.98259
8.53020
8.11090
7.36009
Required:
(1) Determine the following:
Principal to be repaid:
Semi-annual interest payments:
n = _10
r =
(2) Determine the cash proceeds from the bond issue.
Expert Solution
Step 1
Bond is a security that is used by entities to raise debt from public-at-large. Bonds are also listed at exchanges which provide liquidity to holders.
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