Compute the price of the bonds on their issue date

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Reference no: EM13755519

On Jan 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and Dec 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. The following info 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: EM13755519

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