Question

I need help with questions 2-5 they follow the same pattern.

Complete the below table to calculate the price of a $1.1 million bond issue under each of the following independent assumptions (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): 1. Maturity 11 years, interest paid annually, stated rate 10%, effective (market) rate 12%. 2. Maturity 9 years, interest paid semiannually, stated rate 10%, effective ( market) rate 12%. 3. Maturity 5 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%. 4. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%. 5. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 12%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 12%. (Round your answers to the nearest whole dollar.) na Table values are based on: 20 6.0% Cash Flow Amount Interest Principal | $ 1,100,000 Price of bonds Present Value < Required 4 Required 5 )

Answer 1

Requirement 2:

Table Values are based on:
n=	18
i=	6%
Cash Flow	Amount	Present Value
Interest	$55,000	$595,518
Principal	$1,100,000	$385,374
Price of bonds		$980,892

n = 9 years x 2 payments = 18

i = Semi-annual rate of Market rate

Interest payment = $1,100,000 x 5% = $55,000

Present value of interest payment	$595,518
[$55,000 x 10.82760 present value annuity factor (6%, 18 years)]
Present value of face value	$385,374
[$1,100,000 x 0.35034 present value factor (6%, 18 years)]
Price of bonds	$980,892

Requirement 3:

Table Values are based on:
n=	10
i=	5%
Cash Flow	Amount	Present Value
Interest	$66,000	$509,634
Principal	$1,100,000	$675,301
Price of bonds		$1,184,935

n = 5 years x 2 payments = 10

i = Semi-annual rate of Market rate

Interest payment = $1,100,000 x 6% = $66,000

Present value of interest payment	$509,634
[$66,000 x 7.72173 present value annuity factor (5%, 10 years)]
Present value of face value	$675,301
[$1,100,000 x 0.61391 present value factor (5%, 10 years)]
Price of bonds	$1,184,935

Requirement 4:

Table Values are based on:
n=	20
i=	5%
Cash Flow	Amount	Present Value
Interest	$66,000	$822,505
Principal	$1,100,000	$414,579
Price of bonds		$1,237,084

n = 10 years x 2 payments = 20

i = Semi-annual rate of Market rate

Interest payment = $1,100,000 x 6% = $66,000

Present value of interest payment	$822,505
[$66,000 x 12.46220 present value annuity factor (5%, 20 years)]
Present value of face value	$414,579
[$1,100,000 x 0.37689 present value factor (5%, 10 years)]
Price of bonds	$1,237,084

Requirement 5:

Table Values are based on:
n=	20
i=	6%
Cash Flow	Amount	Present Value
Interest	$66,000	$66,000
Principal	$1,100,000	$1,100,000
Price of bonds		$1,166,000

n = 10 years x 2 payments = 20

i = Semi-annual rate of Market rate