Calculate the selling price of the bonds

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Question - Olay Inc. issues $40,000, 8%, 10-year bonds payable on January 1, 2020. Calculate the selling price of the bonds under the following separate assumptions.

a. The bonds pay cash interest annually ($3,200) and the market rate of interest on similar bonds is 10%.

b. The bonds pay cash interest annually ($3,200) and the market rate of interest on similar bonds is 8%.

c. The bonds pay cash interest annually ($3,200) and the market rate of interest on similar bonds is 6%.

d. The bonds pay cash interest semiannually ($1,600) and the market rate of interest on similar bonds is 10%.

e. The bonds pay cash interest semiannually ($1,600) and the market rate of interest on similar bonds is 8%.

f. The bonds pay cash interest semiannually ($1,600) and the market rate of interest on similar bonds is 6%.

Reference no: EM132477311

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