Compute the present value of the principal

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Question - On January 1, 2020, Cotton Corp. issued eight-year, 3% bonds with a face value of $600,000, with interest payable semi-annually on June 30 and December 31. The bonds were sold to yield 4%. Table values are:

Present value of 1 for 8 periods at 3% .789

Present value of 1 for 8 periods at 4% .731

Present value of 1 for 16 periods at 1.5% .788

Present value of 1 for 16 periods at 2% .728

Present value of annuity for 8 periods at 3% 7.020

Present value of annuity for 8 periods at 2% 7.325

Present value of annuity for 16 periods at 1.5% 14.131

Present value of annuity for 16 periods at 2% 13.578

Required - Compute the present value of the principal?

a. $473,400.

b. $472,800.

c. $436,800.

d. $438,600.

Reference no: EM132571692

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