The following information pertains to BARU NUTS Company's issuance of bonds on July 1, 2021:*What should be the issue price of the bonds? P1,000,000 Interest payments10 years Effective yieldFace amountJuly 1 and January 1Term12%Stated interest rate8%4%6%8%12%PV of an ordinary annuity of 1 for 10 periodsPV of an ordinary annuity of 1 for 20 periods8.117.366.716.1413.5911.479.828.51PV of a single amount for 10 periods0.680.560.460.32PV of a single amount for 20 periods0.460.310.210.31

Issue price of bonds = Present value of Interest Payments + Redemption value Notes: In absence of…

Answered: P 1,000,000 Interest payments 10 years…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 17E

See similar textbooks

Similar questions

Future value interest factor of an ordinary annuity of $1 per period at i% for n periods, FVIFA(i,n). 3.5% 4.0% 4.5% 8.0% 8.5% 9.5% Period 0.5% 1.0% 1.0000 1.0000 2.0050 2.0100 1 1.5% 2.0% 2.5% 1.0000 1.0000 1.0000 20150 2.0200 2.0250 2 3.2781 3 1.0000 2.0950 3.2940 4.6070 6.0446 4 7 8.1420 9.5491 8 9 10 16.3856 16 8699 18.5312 21.3843 24.5227 27.9750 31.7725 35.9497 26.9964 28.2129 30.8402 40.5447 45.5992 51.1591 57.2750 64.0025 71.4027 58.1767 76.7898 824164 3.0% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 9.0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 2.0300 2.0350 2.0400 2.0450 2.0500 2.0550 2.0600 2.0650 2.0700 2.0750 2.0800 2.0850 2.0900 3.0150 3.0301 3.0452 3.0604 3.0756 3.0909 3.1062 3.1216 3.1370 3.1525 3.1680 3.1836 3.1992 3.2149 3.2306 3.2464 4.0301 4.0604 3.2622 4.0909 4.1216 4.1525 4.1836 4.2149 4.2465 4.2782 4.3101 4.3423 4.3746 4.4072 4.4399 4.4729 4.5061 4.5395 5 5.0503 4.5731 5.1010 5.1523 5.2040 5.2563 5.3091 5.3625 5.4163 5.4707…
Complete the ordinary annuity. (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount of Payment payable Years Interest rate Value of annuity payment 12,800 Semiannually 8 % acer Σ %24
What is the future equivalent at EOY 8 of $5,000 annual payments made at the beginning of each year for 8 years at 7% annual interest rate? O a. $55,355 b. $51,644 c. $51,299 d. $54,890 e. $60,355
Net present value-unequal lives Project 1 requires an original investment of $50,100. The project will yield cash flows of $10,000 per year for 8 years. Project 2 has a computed net present value of $11,600 over a 6-year life. Project 1 could be sold at the end of 6 years for a price of $38,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 6% 10% Year 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 0.943 0.890 0.840 0.792 0.747 7 0.705 0.665 0.627 0.592 0.558 0.943 1.833 2.673 3.465 4.212 4.917 0.909 5.582 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.909 1.736 2.487 3.170 3.791 4.355 12% 4.868 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.893 1.690 2.402 3.037 3.605 4.111 15% 4.564 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.870 1.626 2.283 2.855 3.353…
11. At an annual effective annual interest rate of 6.3%, an annuity-immediate with 4N level annual payments of 1,000 has a present value of 14,113. Determine the fraction of the total present value represented by the first set of N payments and the third set of N payments combined. A. 57% B. 60% C. 63% D. 66% E. 69%
b C d (D Find the future value of ordinary annuity of the following items: Sinking Fund Payment Payment Period every 6 months every year every 3 months every month every 3 months Time Period 8 years 14 years 5 years 1½ years 4 years Nominal Rate 10% 9% 12% 12% 16% Interest Compounded semi-annually annually quarterly monthly quarterly Future Value 500,000 2,500,000 15,000 40,000 187,000
Assuming a 360-day year, when a $14, 000, 90 - day, 12% interest - bearing note payable matures, the total payment will be a. $14, 420 b. $420 c. $1,680 d. $15, 680
Tait is entering high school and is determined to save money for college. Tait feels he can save $2,500 each year for the next four years from his part-time job. If Tait is able to invest at 6%, how much will he have when he starts college? (Click the icon to view Present Value of $1 table.) E (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) E (Click the icon to view Future Value of Ordinary Annuity of $1 table.) - X Reference (Round your answer to the nearest dollar.) Reference When Tait starts college he will have Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Future Value of $1 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.917 0.909 0.893 | 0.877 0.870 0.862 0.847 0.833 0.826 0.797 0.769 0.756 0.743…
Annuities (PV and FV) Annual Amount Deposited 860 Annual Interest Rate 9.2% Deposits are made for each of years 1 - 40. 1. Future value of ordinary annuity. What will these deposits have grown to by end of year 40? A Between 50,000 and 212,000 B Between 212,000 and 253,000 C Between 253,000 and 312,000 D Between 312,000 and 420,000 2. Future value of annuity due What will these deposits have grown to by end of year 40? A Between 50,000 and 227,000 B Between 227,000 and 269,000 C Between 269,000 and 329,000 D Between 329,000 and 420,000 3. Present value of ordinary annuity What are these deposits worth today? A Between 5,000 and 9,400 B Between 9,400 and 10,300 C Between 10,300 and 11,200 D Between 11,200 and 15,000 4. Present value of annuity due What are these deposits worth today? A Between 5,000 and 10,100 B Between 10,100 and 11,100 C Between 11,100 and 12,100 D Between 12,100 and 15,000
What is the future value of an annuity due of $800 paid semi-annually for the next 7 years, with a yield of 5% p.a. compounded semi-annually? Select one: a. $13,215.16 b. $6,923.22 c. $11,200.00 d. $13,545.54
Assuming a 360-day year, when a $11,918, 90-day, 10% interest-bearing note payable matures, total payment will be a.$13,110 b.$1,192 c.$298 d.$12,216
Annual payment # of years Rate Output area: a) PV of ordinary annuity PV of annuity due b) FV of ordinary annuity FV of annuity due $ 14,500 5 7.1%

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS