On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8%. Using the present value factors below, the issue (selling) price of the bonds is: number of periods interest rate (n)= 3 636 6 Multiple Choice (i)= 7.0% 3.5% 8.0% 4.0% O $236,032. $223,968. O $230,000. $42.199. $181,769. Present Value of an Annuity (series of payments) 2.6243 5.3286 2.5771 5.2421 Present value of 1 (single sum) 0.8163 0.8135 0.7938 0.7903
On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8%. Using the present value factors below, the issue (selling) price of the bonds is: number of periods interest rate (n)= 3 636 6 Multiple Choice (i)= 7.0% 3.5% 8.0% 4.0% O $236,032. $223,968. O $230,000. $42.199. $181,769. Present Value of an Annuity (series of payments) 2.6243 5.3286 2.5771 5.2421 Present value of 1 (single sum) 0.8163 0.8135 0.7938 0.7903
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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![On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature in 3 years. The contract rate is 7%, and interest
is paid semiannually on June 30 and December 31. The market rate is 8%. Using the present value factors below, the issue (selling) price of the bonds
is:
number of
periods interest rate
(n)=
3
636
Multiple Choice
(i)=
7.0%
3.5%
8.0%
4.0%
$236,032.
$223,968.
$230,000.
$42,199.
$181,769.
Present Value of
an Annuity
(series of
payments)
2.6243
5.3286
2.5771
5.2421
Present value
of 1 (single
sum)
0.8163
0.8135
0.7938
0.7903](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b52f557-3b61-4a6d-a293-05da09ea3c21%2Fbedb6fdf-9117-4f92-bfe4-3bcfd9d4232e%2Fk67y0b5_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature in 3 years. The contract rate is 7%, and interest
is paid semiannually on June 30 and December 31. The market rate is 8%. Using the present value factors below, the issue (selling) price of the bonds
is:
number of
periods interest rate
(n)=
3
636
Multiple Choice
(i)=
7.0%
3.5%
8.0%
4.0%
$236,032.
$223,968.
$230,000.
$42,199.
$181,769.
Present Value of
an Annuity
(series of
payments)
2.6243
5.3286
2.5771
5.2421
Present value
of 1 (single
sum)
0.8163
0.8135
0.7938
0.7903
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