Bookmarks Window Help Bond Issue on January 1, Cangor, Inc., issues 10%, syear b

Question

Bookmarks Window Help Bond Issue on January 1, Cangor, Inc., issues 10%, syear bonds with a race vaue of $150,000 when the emetive rate i2%, interest s to be pad woman Prepare calculations to prve that the selling price ef the bonds is $138.959.90. ack here to access the tables to use with thi" e eroe. Amand your anwen to two d onaik" necesary 138,999 90 Selling price should determine the senng price by using the emective rate to determine the meen vue of bom the Mure propal and perede merest payments when "teret apsinumn"w-m0.in nem periods per year to determine the effective rate per semiannual period efor example, i2% + 2 pened. 6% se annual men wou messe "press the S-tome myn srenom semiannual periods. You should use the same number of interest periods for beth principal and interest calculations

Explanation / Answer

where i= 6% n= 10 years principal (150,000*.55839= 83758.5 interest 150,000*5%*7.36009= 55200.68 selling price 138959.18 for principal use PV of $1 table at 6% for 10 years for interest use PV of ordinary annuity at 6% for 10 years there is slight difference , I would sugget u to use the table provided in ur question exercise

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