b On January 1 2017 Buffalo Corporation purchased 329 of th

? (b) On January 1, 2017, Buffalo Corporation purchased 329 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. Buffalo purchased the bonds to yield 11%, How much did Buffalo pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458, 581.) Buffalo must pay for the bonds

Solution

Amount PV factor Present value Annual interest 29610 5.88923 174380 Principal 329000 0.35218 115867 Buffalo must pay for the bonds 290247