The cost of a project from a construction firm is acquired from securing a bond contract from a private lender. The bond will mature in 10 years and has a par value of 1 million dollars in 1000 units. The contract states that the interest payments are made per quarter at 8%. If the private lender desires to earn 12% nominal interest compounded quarterly on 10,000 worth of the bond. what should the purchase price be?
The cost of a project from a construction firm is acquired from securing a bond contract from a private lender. The bond will mature in 10 years and has a par value of 1 million dollars in 1000 units. The contract states that the interest payments are made per quarter at 8%. If the private lender desires to earn 12% nominal interest compounded quarterly on 10,000 worth of the bond. what should the purchase price be?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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![The cost of a project from a construction firm is acquired from securing a bond contract
from a private lender. The bond will mature in 10 years and has a par value of 1 million
dollars in 1000 units. The contract states that the interest payments are made per quarter
at 8%. If the private lender desires to earn 12% nominal interest compounded quarterly on
10,000 worth of the bond. what should the purchase price be?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2719b32a-b246-4bf2-a836-ed936179bdbf%2F8a03e71e-5c53-4764-bf35-9c6994a7f322%2Fi9iczr_processed.png&w=3840&q=75)
Transcribed Image Text:The cost of a project from a construction firm is acquired from securing a bond contract
from a private lender. The bond will mature in 10 years and has a par value of 1 million
dollars in 1000 units. The contract states that the interest payments are made per quarter
at 8%. If the private lender desires to earn 12% nominal interest compounded quarterly on
10,000 worth of the bond. what should the purchase price be?
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