easy_bonds_amortization_tables_1_

easy_bonds_amortization_tables_1_ - Paid Liability Period 1...

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Scenario A, Market Rate of 8% less than Contract Rate of 10%, Therefore, Bonds Sell at a Premium $10,000 Face Value, 3 years to maturity, Semi-annual Compounding (a) (b) (c) (d) (e) [a x 4%] [$10,000 x 5%] [b -c] [ a + d ] Start of Interest Interest Change in End of Period Expense Paid Liability Period 1 $10,521 $421 $500 $(79) $10,442 2 $10,442 $418 $500 $(82) $10,360 3 $10,360 $414 $500 $(86) $10,274 4 $10,274 $411 $500 $(89) $10,185 5 $10,185 $407 $500 $(93) $10,092 6 $10,092 $404 $500 $(96) $9,996 TOTALS $2,475 $3,000 $(525) ` Rounding ? $2,479 $3,000 $521
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Scenario B, Market Rate of 10% less than Contract Rate of 10%, Therefore, Bonds Sell at Face Value of Maturity Value $10,000 Face Value, 3 years to maturity, Semi-annual Compounding (a) (b) (c) (d) (e) [a x 5%] [$10,000 x 5%] [b -c] [ a + d ] Start of Interest Interest Change in End of Period Expense
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Unformatted text preview: Paid Liability Period 1 $10,000 $500 $500 $- $10,000 2 $10,000 $500 $500 $- $10,000 3 $10,000 $500 $500 $- $10,000 4 $10,000 $500 $500 $- $10,000 5 $10,000 $500 $500 $- $10,000 6 $10,000 $500 $500 $- $10,000 TOTALS $3,000 $3,000 Scenario C, Market Rate of 12% less than Contract Rate of 10%, Therefore, Bonds Sell at a Discount $10,000 Face Value, 3 years to maturity, Semi-annual Compounding (a) (b) (c) (d) (e) [a x 6%] [$10,000 x 5%] [b -c] [ a + d ] Start of Interest Interest Change in End of Period Expense Paid Liability Period 1 $9,509 $571 $500 $71 $9,580 2 $9,580 $575 $500 $75 $9,654 3 $9,654 $579 $500 $79 $9,734 4 $9,734 $584 $500 $84 $9,818 5 $9,818 $589 $500 $89 $9,907 6 $9,907 $594 $500 $94 $10,001 TOTALS $3,492 $3,000 $492 Rounding ? $3,491 $3,000 $491...
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easy_bonds_amortization_tables_1_ - Paid Liability Period 1...

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