Issue Price of a Bond Maggie Enterprises issued 100000 of 6

Issue Price of a Bond Maggie Enterprises issued $100,000 of 6%, five-year bonds with interest payable semiannually. Determine the issue price if the bonds are priced to yield (a) 696, (b) 10%, and (c) 2%. Use financial calculator or Excel to calculate answers. Round answers to the nearest whole number. a.) 100,000 b.) 84,556 c.) 118,943 Check You have correctly selected 2 Partially correct Marks for this submission: 2.00/3.00

Solution

b Semi-annual interest PV factor Present value 3000 7.721735 23165.20 100000 0.613913 61391.33 Issue price of bonds 84557 Issue price of bonds = $84557