Complete the below table to calculate the price of a $1.6 million bond issue und

Question

Complete the below table to calculate the price of a $1.6 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.

Enter your answers in whole dollars.):

1. Maturity 13 years, interest paid annually, stated rate 9%, effective (market) rate 12%
   
    

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

   
    

    

3. Maturity 6 years, interest paid semiannually, stated rate 11%, effective (market) rate 10%
   
        

   
    

4. Maturity 10 years, interest paid semiannually, stated rate 11%, effective (market) rate 10%
   
        

   
    

5. Maturity 10 years, interest paid semiannually, stated rate 11%, effective (market) rate 11%
       

   
    

    

Table value are based on :                                                                                    n= i= Cash Flow amount present value intreset principal price of bonds

Explanation / Answer

1) n = 13   ; i = 12%

2) n = 20 ; i=6%

3)n=12 ; i=5%

4) n = 20 ; i =5%

5) n=20 ; i= 5.5%

Cash flow Amount PV Interest 144,000*6.42355 $924,991.20 Principal 1,600,000*.22977 366,672.00 Price of bonds 1,292,663.20

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