- +1-530-264-8006
- info@tutorsglobe.com

What is the issue price of the bonds

Problem: On January 1, 2014, Marino Corporation issued eight year bonds with a face value of $5,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:

Present value of 1 for 8 periods at 6%...................................... .627

Present value of 1 for 8 periods at 8%...................................... .540

Present value of 1 for 16 periods at 3%..................................... .623

Present value of 1 for 16 periods at 4%..................................... .534

Present value of an annuity for 8 periods at 6%........................ 6.210

Present value of an annuity for 8 periods at 8%........................ 5.747

Present value of an annuity for 16 periods at 3%........................ 12.561

Present value of an annuity for 16 periods at 4%........................ 11.652

What is the issue price of the bonds?

a. $4,417,800

b. $4,424,100

c. $4,600,000

d. $5,619,000

Now Priced at $20 (50% Discount)

Recommended **(97%)**

18,76,764

Questions

Asked

21,311

Experts

9,67,568

Questions

Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment
## Q : Problem regarding annuity for semiannual payments

Kay Mart owns an annuity that will begin making semiannual payments of $7500 in perpetuity to her or her heirs.