Disc_and_Prem_Bonds

Disc_and_Prem_Bonds - Proceeds = (20,000)(PVa, n=10,...

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$500,000 5-year DISCOUNT bond; 4%/6 months face interest rate; 4.15% market interest rate Proceeds = (20,000)(PVa, n=10, i=4.15)+(400,000)(PVsa, n=10, i=4.15%) = 493,964 Period at borrowing 493,964 6 months 20,500 (20,000) 500 494,464 12 months 20,520 (20,000) 520 494,984 18 months 20,542 (20,000) 542 495,526 24 months 20,564 (20,000) 564 496,090 30 months 20,588 (20,000) 588 496,678 36 months 20,612 (20,000) 612 497,290 42 months 20,638 (20,000) 638 497,927 48 months 20,664 (20,000) 664 498,591 54 months 20,692 (20,000) 692 499,283 60 months 20,720 ### (499,280) 3 Interest Expense Cash Flow Change in Carrying Anount Carrying Amount
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$500,000, 5-year PREMIUM bond; 4%/6 months face interest rate; 3.9% market interest rate
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Unformatted text preview: Proceeds = (20,000)(PVa, n=10, i=3.9%)+(500,000)(PVsa, n=10, i=3.9%) = 504,078 Period at borrowing 504,078 6 months 19,659 (20,000) (341) 503,737 12 months 19,646 (20,000) (354) 503,383 18 months 19,632 (20,000) (368) 503,015 24 months 19,618 (20,000) (382) 502,632 30 months 19,603 (20,000) (397) 502,235 36 months 19,587 (20,000) (413) 501,822 42 months 19,571 (20,000) (429) 501,393 48 months 19,554 (20,000) (446) 500,948 54 months 19,537 (20,000) (463) 500,484 60 months 19,519 ### (500,481) 3 Interest Expense Cash Flow Change in Carrying Anount Carrying Amount...
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Disc_and_Prem_Bonds - Proceeds = (20,000)(PVa, n=10,...

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