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A company issues bonds with a par value of 800000 on their

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A company issues bonds with a par value of $800,000 on their issue date. The bonds mature in 5 years and pay 6% annual interest in two semiannual payments. On the issue date, the market rate of interest is 8%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:

A company issues bonds with a par value of $800,000 on their issue date. The bonds mature in 5 years and pay 6% annual interest in two semiannual payments. On the issue date, the market rate of interest is 8%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:

  • Present value of annuity for 10 periods at 3%....8.5302
  • Present value of annunity for 10 periods at 4%....8.1109
  • Present value of 1 due in 10 periods at 3%..... 0.7441
  • Present value of 1 due in 10 periods at 4%.....0.6756

Reference no: EM13604637

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