bond valuation using effective interest method

bond valuation using effective interest method - $1,000,000...

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Face Value $1,000,000.00 Number of Periods 5 Market Interest Rate 8% Stated Interest Rate 10% Periodic Payment $100,000.00 Present Value of Principal $680,583.20 Present Value of Interest Payments $399,271.00 Bond Price $1,079,854.20 1 2 3 4 5 Beginning Balance $1,079,854 $1,066,243 $1,051,542 $1,035,665 $1,018,519 Interest Expense $86,388 $85,299 $84,123 $82,853 $81,481 Payment ($100,000) ($100,000) ($100,000) ($100,000) ($100,000) Ending Balance $1,066,243 $1,051,542 $1,035,665 $1,018,519 $1,000,000 Bond Premium Amortization ($13,612) ($14,701) ($15,877) ($17,147) ($18,519)
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Face Value $1,000,000.00 Number of Periods 5 Market Interest Rate 10% Stated Interest Rate 10% Periodic Payment $100,000.00 Present Value of Principal $620,921.32 Present Value of Interest Payments $379,078.68 Bond Price $1,000,000.00 1 2 3 4 5 Beginning Balance $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 Interest Expense $100,000 $100,000 $100,000 $100,000 $100,000 Payment ($100,000) ($100,000) ($100,000) ($100,000) ($100,000) Ending Balance
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Unformatted text preview: $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 Face Value $1,000,000.00 Number of Periods 5 Market Interest Rate 12% Stated Interest Rate 10% Periodic Payment $100,000.00 Present Value of Principal $567,426.86 Present Value of Interest Payments $360,477.62 Bond Price $927,904.48 1 2 3 4 5 Beginning Balance $927,904 $939,253 $951,963 $966,199 $982,143 Interest Expense $111,349 $112,710 $114,236 $115,944 $117,857 Payment ($100,000) ($100,000) ($100,000) ($100,000) ($100,000) Ending Balance $939,253 $951,963 $966,199 $982,143 $1,000,000 Bond discount amortization $11,349 $12,710 $14,236 $15,944 $17,857 Face Value at Maturity $1,000,000.00 Discount Rate 5% Maturity period 5 Proceeds $783,526.17 1 2 3 4 5 Beginning Balance $783,526 $822,702 $863,838 $907,029 $952,381 Interest Expense $39,176 $41,135 $43,192 $45,351 $47,619 Payment $0 $0 $0 $0 $0 Ending Balance $822,702 $863,838 $907,029 $952,381 $1,000,000...
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This note was uploaded on 02/05/2011 for the course ACCT 301 taught by Professor Hasan during the Fall '09 term at George Mason.

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bond valuation using effective interest method - $1,000,000...

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