16. $_____________(rounded to nearest dollar) A ten year bond issue with a face amount of $100,000 bears interest...
16. $_____________(rounded to nearest dollar) A ten year bond issue with a face amount of $100,000 bears interest at the rate of 6.9%. The current market rate of interest is 7.0%. Determine the issue price of this annual bond.
Homework Answers
| $99,297.70 | |
| Present value of Bond Face Value | $50,835 |
| $100,000 x 0.50835 i.e. (PVF 10, 7%) | |
| Present value of Bond Interest | $48,463 |
| $6,900 x 7.02358 | |
| $99,297.70 | |
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