w6_homework_answers

w6_homework_answers - Devry University ACC305 Intermediate...

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Devry University ACC305 Intermediate Accounting 2 Solutions Week 6 E 14-2, 14-3, 14-4, P14-4
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Exercise 14-2 1. Maturity Interest paid Stated rate Effective (market) rate 10 years annually 10% 12% Interest $100,000 ¥ x 5.65022 * = $565,022 Principal $1,000,000 x 0.32197 ** = 321,970 Present value (price) of the bonds $886,992 ¥ 10% x $1,000,000 present value of an ordinary annuity of $1: n=10, i=12% (Table 4) ** present value of $1: n=10, i=12% (Table 2) 2. Maturity Interest paid Stated rate Effective (market) rate 10 years semiannually 10% 12% Interest $50,000 ¥ x 11.46992 * = $573,496 Principal $1,000,000 x 0.31180 ** = 311,800 Present value (price) of the bonds $885,296 5% x $1,000,000 present value of an ordinary annuity of $1: n=20, i=6% (Table 4) ** present value of $1: n=20, i=6% (Table 2) 3. Maturity Interest paid Stated rate Effective (market) rate 10 years semiannually 12% 10% Interest $60,000 ¥ x 12.46221 * = $ 747,733 Principal $1,000,000 x 0.37689 ** = 376,890 Present value (price) of the bonds $1,124,623 6% x $1,000,000 present value of an ordinary annuity of $1: n=20, i=5% (Table 4) ** present value of $1: n=20, i=5% (Table 2) 4. Maturity Interest paid Stated rate Effective (market) rate 20 years semiannually 12% 10% Interest $60,000 ¥ x 17.15909 * = $1,029,545 Principal $1,000,000 x 0.14205 ** = 142,050 Present value (price) of the bonds $1,171,595
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This note was uploaded on 10/12/2010 for the course ACCT 305 taught by Professor Rans during the Summer '10 term at DeVry Decatur.

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w6_homework_answers - Devry University ACC305 Intermediate...

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