Any help appriciated! thanks! Bringham Company issues bonds with a par value of

Question

Any help appriciated! thanks!

Bringham Company issues bonds with a par value of $500,000 on their stated issue date. The bonds mature in 8 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%.

Table Values are Based on:

Any help appriciated! thanks!

Bringham Company issues bonds with a par value of $500,000 on their stated issue date. The bonds mature in 8 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%.

Table Values are Based on:

n = i = Cash Flow Table Value Amount Present Value Par (maturity) value x Interest (annuity) x Price of bonds

Explanation / Answer

Calculate price of bonds :

n 16 years i 4% Cash flow Table value * Amount = Present value Par (maturity) value 0.53391 500000 = 266955 Interest (annuity) 11.65230 * 15000 = 174785 Price of bonds 441740

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