Problem
On January 1, 2018, Frontier World issues $39.6 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.
If the market rate is 6%, calculate the issue price.
If the market rate is 7%, calculate the issue price.
If the market rate is 8%, calculate the issue price.