January 1, Ruiz Company issued bonds as follows: e Amount: mber of Years: ted Interest Rate: erest payments per year $500,000 15 7% 2 quired: Calculate the bond selling price given the two market interest rates below.
January 1, Ruiz Company issued bonds as follows: e Amount: mber of Years: ted Interest Rate: erest payments per year $500,000 15 7% 2 quired: Calculate the bond selling price given the two market interest rates below.
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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Please answer all boxes in yellow, and show formulas (work). Thank you!
Transcribed Image Text:C16
1
ΝΗ
A
3
4
Face Amount:
5 Number of Years:
6 Stated Interest Rate:
7
8
2
On January 1, Ruiz Company issued bonds as follows:
<
fx
Interest payments per year
a)
=ue of $1
B
$500,000
=
Annual Market Rate
Semiannual Interest Payment:
PV of Face Amount:
+ PV of Interest Payments:
= Bond Selling Price:
15
7%
2
9
Required:
10
1) Calculate the bond selling price given the two market interest rates below.
11 Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottom of
12 this worksheet).
13 Note: Rounding is not required.
14
15
16
17
18
19
20
21 b)
22
23
24
25
+ PV of Interest Payments:
Bond Selling Price:
Annual Market Rate
Semiannual Interest Payment:
PV of Face Amount:
Future Value of Annuity of $1
9%
D
6.00%
F
G
Present Value of Annuity of $1 A Graded Worksheet +
H
I
J
Transcribed Image Text:A1
B
1 TABLE 2 Present Value of $1
2
3
4 1
5
2
6 3
7 4
8 5
6
10 7
11 8
12 9
13 10
14 11
15 12
16 13
17 14
18 15
19 16
20 17
21 18
19
20
24 21
25 25
LO
이
22222
23
periods
<
1.00%
fx TABLE 2 Present Value of $1
E
0.99010
0.98030
0.97059
0.96098
0.95147
0.94205
0.93272
0.92348
0.91434
0.90529
0.89632
0.88745
0.87866
0.86996
0.86135
0.85282
0.84438
0.83602
0.82774
0.81954
0.81143
0.77977
1.50%
0.98522
0.97066
0.95632
0.94218
0.92826
0.91454
0.90103
0.88771
0.87459
0.86167
0.84893
0.83639
0.82403
0.81185
0.79985
0.78803
0.77639
0.76491
0.75361
0.74247
0.73150
0.68921
Present Value of $1
Calculation Mode: Automatic Workbook Statistics
D
2.00%
0.98039
0.96117
0.94232
0.92385
0.90573
0.88797
0.87056
0.85349
0.83676
0.82035
0.80426
0.78849
0.77303
0.75788
0.74301
0.72845
0.71416
0.70016
0.68643
0.67297
0.65978
0.60953
2.50%
0.97561
0.95181
0.92860
0.90595
0.88385
0.86230
0.84127
0.82075
0.80073
0.78120
0.76214
0.74356
0.72542
0.70773
0.69047
0.67362
0.65720
0.64117
0.62553
0.61027
0.59539
0.53939
F
3.00%
0.97087
0.94260
0.91514
0.88849
0.86261
0.83748
0.81309
0.78941
0.76642
0.74409
0.72242
0.70138
0.68095
0.66112
0.64186
0.62317
0.60502
0.58739
0.57029
0.55368
0.53755
0.47761
Future Value of Annuity of $1
G
3.50%
0.96618
0.93351
0.90194
0.87144
0.84197
0.81350
0.78599
0.75941
0.73373
0.70892
0.68495
0.66178
0.63940
0.61778
0.59689
0.57671
0.55720
0.53836
0.52016
0.50257
0.48557
0.42315
H
4.00%
0.96154
0.92456
0.88900
0.85480
0.82193
0.79031
0.75992
0.73069
0.70259
0.67556
0.64958
0.62460
0.60057
0.57748
0.55526
0.53391
0.51337
0.49363
0.47464
0.45639
0.43883
0.37512
Present Value of Annuity of $1
I
4.50%
0.95694
0.91573
0.87630
0.83856
0.80245
0.76790
0.73483
0.70319
0.67290
0.64393
0.61620
0.58966
0.56427
0.53997
0.51672
0.49447
0.47318
0.45280
0.43330
0.41464
0.39679
0.33273
J
5.00%
Gra +
0.95238
0.90703
0.86384
0.82270
0.78353
0.7462
0.71068
0.67684
0.64461
0.61391
0.58468
0.55684
0.53032
0.50507
0.48102
0.45811
0.43630
0.41552
0.39573
0.37689
0.35894
0.29530
K
5.50%
0.94787
0.89845
0.85161
0.80722
0.76513
0.72525
0.68744
0.65160
0.61763
0.58543
0.55491
0.52598
0.49856
0.47257
0.44793
0.42458
0.40245
0.38147
0.36158
0.34273
0.32486
0.26223
L
6.00%
0.94340
0.89000
0.83962
0.79209
0.74726
0.70496
0.66506
0.62741
0.59190
0.55839
0.52679
0.49697
0.46884
0.44230
0.41727
0.39365
0.37136
0.35034
0.33051
0.31180
0.29416
0.23300
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