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Compute the issue or selling price of the bonds

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Reference no: EM132758671

Problem 1: A company issues 6%, 5 year bonds with a par value of $800,000 and semiannual interest payments. On the issue date, the annual market rate of interest is 8%. Compute the issue (selling) price of the bonds.

The following information is taken from present value tables:

Present value of an annuity for 10 periods at 3% 8.5302
Present value of an annuity 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: EM132758671

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