On December 31, 2018, Interlink Communications issued 4% stated rate bonds with

Question

On December 31, 2018, Interlink Communications issued 4% stated rate bonds with a face amount of $114 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginning in 2019. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest for similar bonds was 5%. Enter your answers in whole dollars. Round your final answers to nearest whole dollar amount.) Table values are based on: n- Cash Flow Interest Principal Amount Present Value Price of bonds

Explanation / Answer

Calculate price of bonds :

Table values are based on n 30 years i 5% Cash flow Amount Present value Interest 4560000 70098372 Principal 114000000 26377320 Price of bonds 96475692

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