Calculate the bonds present value

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Reference no: EM131497002

Part Level Submission

Tarawa Limited issued $1,390,000 of 10-year, 5% bonds on January 1, 2015, at a price to yield a market interest rate of 8%. Interest is payable semi-annually on July 1 and January 1. Tarawa has a December 31 year end.

(a) Calculate the bonds’ present value (issue price) on January 1. (Round answer to the nearest whole dollar, e.g. 1,275. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Present value (issue price) of the bonds $

Reference no: EM131497002

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