Complete the below table to calculate the price of a $1.9 million bond issue und

Question

Complete the below table to calculate the price of a $1.9 million bond issue under each of the following independent assumptions (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

1. Maturity 12 years, interest paid annually, stated rate 10%, effective (market) rate 12%

2. Maturity 9 years, interest paid semiannually, stated rate 10%, effective (market) rate 12%

3. Maturity 6 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%

4. Maturity 20 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%

5. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 12%

Maturity 12 years, interest paid annually, stated rate 10%, effective (market) rate 12%. (Round your answers to the nearest whole dollar.)

Explanation / Answer

1) Table values are based on: n = 12 i = 12 Cash Flow Amount Present Value Interest 190000 1176930 Principal 1900000 487683 Price of bonds 1664613 2) Table values are based on: n = 18 i = 6 Cash Flow Amount Present Value Interest 95000 1028622 Principal 1900000 665653 Price of bonds 1694275 3) Table values are based on: n = 12 i = 5 Cash Flow Amount Present Value Interest 114000 1010411 Principal 1900000 1057991 Price of bonds 2068402 4) Table values are based on: n = 40 i = 5 Cash Flow Amount Present Value Interest 114000 1956136 Principal 1900000 269887 Price of bonds 2226023 5) Table values are based on: n = 20 i = 6 Cash Flow Amount Present Value Interest 114000 1307571 Principal 1900000 592429 Price of bonds 1900000 6) Table values are based on: n = 12 i = 12 Cash Flow Amount Present Value Interest 190000 1176930 Principal 1900000 487683 Price of bonds 1664613

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