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On January 1, 2017, BLANK Corporation purchased 311 of the $1,000 face value, 9%, 10-year bonds...

On January 1, 2017, BLANK Corporation purchased 311 of the $1,000 face value, 9%, 10-year bonds of BLANK #2 Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. BLANK purchased the bonds to yield 11%. How much did BLANK pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

BLANK must pay for the bonds

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Answer #1

Present value of the bonds = Present value of interest @11% for 10 years + Present value of maturity value @11% for 10 years

= 311000*9%*5.88923 + 311000*0.35218

= $274368

He should pay amount $274368.

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