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Correct option is: B. $846 | ||||
Workings: | ||||
Cash flow | Period | Amount | P.V Factor @ 5% | Present Value |
Maturity value | 30 | $ 1,000 | 0.23138 | $ 231 |
Interest (annuity) | 1 to 30 | $ 40 | 15.37245 | $ 615 |
Issue price of bonds | $ 846 | |||
Number of semiannual periods | = | Number of years X 2 | ||
= | 15 years X 2 | |||
= | 30 years | |||
Interest payment | = | $ 40 | ||
Semiannual market interest rate | = | 5% |
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If...
An investor purchases a 7-year $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (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.) Multiple Choice 0 $901. 0 $944. O S1000
An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (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.) Ο $969. Ο $1,000. Ο $931. Ο $1,621.
An investor purchases a 10-year , $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (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.) Multiple Choice $828 $878 $1,000 О O $1,516
An investor purchases a 9-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (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.)
An investor purchases a 7-year, $1,000 par value bond that pays semianual interest of $40. If the semianual market rate of interest is 5%, what is the current market value of the bond? 15 current market value of the bone ASLASSEYASIDSLESVOS provided) $901 $944 $1000
Sand Explorers issues bonds due in 10 years with a stated interest rate of 6% and a face value of $210,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. Using present value tables, calculate the issue price of the bonds. (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.) Multiple Choice $177,569. $226,369. Loooo $264,081. $210,000.
Sand Explorers issues bonds due in 10 years with a stated interest rate of 8% and a face value of $150,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds. (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.) Multiple Choice $118,394. $160,660. $185,076. $150,000.
Mind Explorers issues bonds with a stated interest rate of 8%, face value of $180,000, and due in 10 years. Interest payments are made semi- annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds. (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.) Multiple Choice $192,792. $180,000 oooo $146,426. $167,769.
Seaside issues a bond that has a stated interest rate of 7%, face amount of $40,000, and is due in 8 years. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond? (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.) Multiple Choice $65,276. $37,669. $61,356. $40,000.
Seaside issues a bond that has a stated interest rate of 10%, face amount of $50,000, and is due in 5 years. Interest payments are made semi-annually. The market rate for this type of bond is 12%. What is the issue price of the bond? (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.) Multiple Choice $83,920. $46,320. $53,605. $50,000.