On January 1, 20x1,  ABC Co. issued 1,000, ₱4,000, 12%, 3-year bonds. Principal is due on December 31, 20x3 but interests are due annually every year-end. The effective interest rate is 10%. How much is the initial value of the bonds? PV of P1 at 12% for 3n = . 71178                           PV of P1 at 10% for 3n = .75131 PV ordinary annuity at 12% for 3n =  2.40183      PV ordinary annuity at 10% for 3n = 2.48685     3,005,240 3,807,852 4,000,000 4,198,928

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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On January 1, 20x1,  ABC Co. issued 1,000, ₱4,000, 12%, 3-year bonds. Principal is due on December 31, 20x3 but interests are due annually every year-end. The effective interest rate is 10%. How much is the initial value of the bonds?
PV of P1 at 12% for 3n = . 71178                           PV of P1 at 10% for 3n = .75131
PV ordinary annuity at 12% for 3n =  2.40183      PV ordinary annuity at 10% for 3n = 2.48685

 
 
3,005,240
3,807,852
4,000,000
4,198,928
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