Present Value of Bonds Payable; Premium Moss Cound $10,000 of 12 bonds with interest payable semana...

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Question

Answer 1

Answer #1

Number of semi-annual periods = 5*2 = 10

Semi-annual rate = 10%/2 = 5%

Present value = 510,000*12%*1/2*PVAF(5%, 10 periods) + 510,000*PVF(5%, 10 periods)

= 30,600*7.7217 +510,000*0.6139

= $549,373.02

i.e. $549,373

Answer 2

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