TABLE 94 Present Value of Annuity of 1 Periods 2 3 4 5 6 10

TABLE 9-4 Present Value of Annuity of $1 Periods 2% 3% 4% 5% 6% 10% 12% 15% 97087 96154 94340 93458 92593 90909 89286 1.83339 1.80802 1.78326 1.73554 1.69005 2.62432 2.57710 2.48685 2.40183 3.31213 3.16987 3.03735 4.45182 432948 4.21236 4.10020 3.99271 3.79076 3.60478 5.60143 5.41719 5.24214 5.07569 4.91732 4.766544.62288 4.35526 4.11141 6.47199 6.23028 6.00205 5.78637 5.58238 5.38929 5.20637 4.86842 4.56376 6.20979 5.97130 5.74664 5.33493 4.96764 1 7.43533 7.10782 6.80169 6.51523 6.24689 5.75902 5.32825 8.98259 8.53020 8.11090 7.72173 7.36009 7.02358 6.71008 6.14457 5.65022 7.88687 749867 7.13896 6.49506 5.93770 10.57534 9.95400 9.38507 8.86325 8.38384 7.94269 7.53608 6.81369 6.19437 11.34837 10.63496 9.98565 9.39357 8.85268 8.35765 7.90378 7.10336 6.42355 12.10625 11.29607 10.56312 9.89864 9.29498 8.74547 8.244247.36669 6.62817 8.55948 7.60608 6.81086 6.97399 14.29187 13.16612 12.16567 11.27407 10.47726 9.76322 9.12164 8.02155 7.11963 7.24967 15.67846 14.32380 13.13394 12.08532 1115812 10.33560 9.60360 8.36492 7.36578 9.81815 8.51356 7.46944 17.65805 15.93692 14.45112 13.16300 2.04158 11.06124 10.20074 8.77154 7.64465 18.91393 16.93554 15.24696 13.79864 12.55036 11.46933 10.52876 8.98474 7.78432 20.12104 17.87684 15.98277 14.37519 13.00317 11.82578 10.80998 9.16095 7.89566 21.28127 18.76411 16.66306 14.8981313.40616 12.13711 11.05108 9.30657 7.98442 1.94156 1.913471.88609 185941 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95423 6.04716 6.12797 6.19823 6.25933 6.35866 6.43377 6.49056 6.53351 6.56598 2861 .77509 2.72325 2.67301 3.54595 346511 338721 3.80773 3.71710 3.62990 3.54595 3.465113 4.71346 4.57971 7.32548 7.01969 6.73274 6.46321 8.16224 7.78611 9.78685 9.25262 8.76048 8.30641 12 13 12.84926 11.9379411.11839 10.37966 9. 13.57771 12.56110 11.65230 10.8377710.10590 9.44665 8.85137 7.82371 14.99203 13.75351 12.65930 11.68959 10.82760 10.05909 9.37189 8.20141 20 16.35143 14.87747 13.59033 12.46221 11.46992 10.59401 24. 26 28 30 22.39646 19.60044 17.29203 15.37245 13.76483 12.40904 1125778 9.42691

Solution

1.Calculate selling price of a bond

a. Selling price of a bond is equal to the present value of a bond in terms of interest payment and the bond face value

P.V. = Face value*PVF(10%,5) + interest* PVFA

= 1000*0.62092 + 80*3.79078

= 620.92 + 303.2624

= $924.1824

SELLING PRICE OF 420 BONDS= $388,156

b. If calculate semianually then interest rate is half and time period becomes double and market rate also half.

P.V. = 1000*0.6139 +40*7.7217

= 922.768

420 BONDS =922.768*420= $387,562

c. P.V = 1000*.3768+40*12.4622

= 875.288

850 BONDS =875.288*850= $743,994

d. P.V.= 500*.2313+30*15.3724

=576.822

1930 BONDS = 1930*576.822=$1,113,266

2.

Thank u

	10%	8%	12%
Amount due at maturity	$402,406	$402,406	$402,406
Interest payment every six month	$20,000	$20,000	$20,000
Selling price	$399,984	$437,500	$366,436