Use the following tables to calculate the present value of a $502,000, 5%, 5-year bond that pays $25,100 ($502,000 × 5%) interest annually, if the market rate of interest is 10%.Present Value of $1 at Compound InterestPeriods5%6%7%10%10.952380.943400.934580.9090920.907030.890000.873440.8264530.863840.839620.816300.7513140.822700.792090.762900.6830150.783530.747260.712990.6209260.746220.704960.666340.5644770.710680.665060.622750.5131680.676840.627410.582010.4665190.644610.591900.543930.42410100.613910.558390.508350.38554Present Value of Annuity of $1 at Compound InterestPeriods5%6%7%10%10.952380.943400.934580.9090921.859411.833391.808021.7355432.723252.673012.624322.4868543.545953.465113.387213.1698754.329484.212364.100203.7907965.075694.917324.766544.3552675.786375.582385.389294.8684286.463216.209795.971305.3349397.107826.801696.515235.75902107.721737.360097.023586.14457Round your intermediate calculations and final answer to the nearest whole dollar.$fill in the blank 1

Present Value of Bond = Present Value of Coupon Payments + Present Value of Redemption Value Present Value of Coupon Payment = Coupon Payment x Present Value Annuity Factor @ 10% for 5 years Annual Coupon Payment = $25100 Present Value Annuity Factor @ 10% for 5 years = 3.79079 Present Value of Coupon Payment = $25100 x 3.79079 = $95149 (round off) Present Value of Redemption Value = Redemption Value x Present Value Factor @10% for 5 years Redemption Value = $502000 Present Value Factor @10% for 5 years = 0.62092 Present Value of Redemption Value = $502000 x 0.62092 = $311702 (round off)Present Value of Bond = $95149 + $311702 = $406851

Answered: Use the following tables to calculate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following tables to calculate the present value of a $502,000, 5%, 5-year bond that pays $25,100 ($502,000 × 5%) interest annually, if the market rate of interest is 10%.

Present Value of $1 at Compound Interest

Periods	5%	6%	7%	10%
1	0.95238	0.94340	0.93458	0.90909
2	0.90703	0.89000	0.87344	0.82645
3	0.86384	0.83962	0.81630	0.75131
4	0.82270	0.79209	0.76290	0.68301
5	0.78353	0.74726	0.71299	0.62092
6	0.74622	0.70496	0.66634	0.56447
7	0.71068	0.66506	0.62275	0.51316
8	0.67684	0.62741	0.58201	0.46651
9	0.64461	0.59190	0.54393	0.42410
10	0.61391	0.55839	0.50835	0.38554

Present Value of Annuity of $1 at Compound Interest

Periods	5%	6%	7%	10%
1	0.95238	0.94340	0.93458	0.90909
2	1.85941	1.83339	1.80802	1.73554
3	2.72325	2.67301	2.62432	2.48685
4	3.54595	3.46511	3.38721	3.16987
5	4.32948	4.21236	4.10020	3.79079
6	5.07569	4.91732	4.76654	4.35526
7	5.78637	5.58238	5.38929	4.86842
8	6.46321	6.20979	5.97130	5.33493
9	7.10782	6.80169	6.51523	5.75902
10	7.72173	7.36009	7.02358	6.14457