Maui Blends, Inc. produces and sells organically grown coffee. On July 1, 2012, Maui Blends, Inc. issued $2,800,000 of 7-year, 13% bonds at a market (effective) interest rate of 11%, receiving cash of $2,695,045. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Compute the price of $2,695,045 received for the bonds by using the tables of present value in Appendix A. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences.
- Present value of the face amount $
- Present value of the semi-annual interest payments $
- Price received for the bonds $