Ex 14-5 - Problem 14-5 9 Bond 80,000,000 Semi 4 years 10 Market Requirement 1 Amount Interest 3,600,000 Principle 80,000,000 PV of Bonds

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Problem 14-5 9% Bond 80,000,000 Semi 4 years 10% Market Requirement 1: Amount PV Factors Interest 3,600,000 6.46 23,267,556 80,000,000 8 payments Principle 80,000,000 0.67684 54,147,200 4.50% 5% interest PV of Bonds 77,414,756 3,600,000 Requirement 2: Cash interest 4.5% 5% 77,414,756 3,600 6.46 23,268 1 3,600,000 3,870,738 270,738 77,685,494 80,000 0.67684 54,147 2 3,600,000 3,884,275 284,275 77,969,768 77,415 3 3,600,000 3,898,488 298,488 78,268,257 4 3,600,000 3,913,413 313,413 78,581,670 5 3,600,000 3,929,083 329,083 78,910,753 6 3,600,000 3,945,538 345,538 79,256,291 7 3,600,000 3,962,815 362,815 79,619,105 8 3,600,000 3,980,955 380,895 80,000,000 28,800,000 31,385,305 2,585,244 Cash interest 4.5% 5% 77,415 1 3,600 3,871 271 77,685 2 3,600 3,884 284 77,970 3 3,600 3,898 298 78,268 4 3,600 3,913 313 78,582 5 3,600 3,929 329 78,911 6 3,600 3,946 346 79,256 7 3,600 3,963 363 79,619 8 3,600 3,981 381 80,000 Effective Interest Increase in balance Outstanding Balance Effective Interest Increase in balance Outstanding Balance
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This note was uploaded on 02/24/2010 for the course ACCT 311 taught by Professor Seese during the Spring '10 term at Old Dominion.

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Ex 14-5 - Problem 14-5 9 Bond 80,000,000 Semi 4 years 10 Market Requirement 1 Amount Interest 3,600,000 Principle 80,000,000 PV of Bonds

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