Homework Answers
Present value of principal = $1,000,000 * 0.7473 = $747,300
Present value of interest payments = ($1,000,000 * 5%) * 4.2124
= $210,620
Selling price of the bond = Present value of principal + Present value of interest payments
= $747,300 + $210,620
= $957,920
The answer is $957,355 (There may be a minimal decimal difference in calculation)
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