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On January 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and December...

On January 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and December 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:

Present value of an annuity for 10 periods at 3%..8.5302

Present value of an annuity for 10 periods at 4%..8.1109

Present value of 1 due in 10 periods at 3%..0.7441

Present value of 1 due in 10 periods at 4%...0.6756

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CH280310_6895_ACC (1).doc

On January 1, a company issues bonds with a par value of $300,000. The bonds mature in
5 years and pay 8% annual interest each June 30 and December 31. On the issue date, the
market rate of...

Sign up to view the full answer

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