143 Determine the market price of a $100,000, 10-year, 4% (pays interest semiann

Question

143 Determine the market price of a $100,000, 10-year, 4% (pays interest semiannually) bond issue sold to yield an effective rate of 6%. (Round factor values to 5 decimal places, e.g. 1.25125 and final answer to 0 decinal places, e.g. (Use the below tables.) PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 396 97087 191347 96154 94340 97561 1.92742 2.85602 3.76197 1.85941 2.72325 3.54595 1.94156 2.88388 2.77509 3.71710 4.57971 3.46511 4.21236 4.71346 4.91732 5.60143 6.47199 7.32548 8.16224 8.98259 5.24214 6.00205 6.34939 5.78637 6.4632 7.0196 7.78611 7.17014 8.75206 9.51421 7.43533 8.11090 7.72173 8.76048 9.38507 9.98565 10.56312 11.11839 9.25262 7.88687 9.78685 10.57534 11.34837 12.10625 12.84926 10.25776 8.86325 9.89864 10.37966 8.85268 9.29498 9.71225 11.69091 11.29607 12.38138 13.57771 12.56110 11.65230 10.83777

Explanation / Answer

n = 20 I = 3% Amount PV factor Present value Semi-annual interest 2000 14.87747 29755 Maturity value 100000 0.55368 55368 Market price of bond issue 85123

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