Compute the issue price of the bond on january

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Reference no: EM132990197

On Jan. 1, 2020, Aero Corporation issues Bonds with a face value of $200,000and a coupon rate of 5 percent. The Bonds mature in four years and pay interest semi-annually every June 30 and December 31.

Required:

Problem 1: Compute the issue (sale) price of the Bond on January 1 for each of the following independent cases: (Show computations / explain calculations)

a. Case A: Market Interest Rate at time of issue is 4 percent

b. Case B: Market Interest Rate at time of issue is 7 percent

Reference no: EM132990197

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