workbook #26 For all bonds: (Use appropriate factorts) from the tables provided.

Question

workbook #26 For all bonds: (Use appropriate factorts) from the tables provided. Do not round interest rate factors. Round"Market interest rate" to 1 decimal place.) Ultimate Butter Popcom issues 6%, 20-year bonds with a face amount of SS0000. The market interest rate for bonds of 1. similar risk and maturity is 6%. Interest is paid semiannually. At what price will the bonds issue?.orsi. PVorsi. EVAofSL and PVAofSD ace amount Semi-annual Interest payment Market interest rate Periods to maturity ssue price Circle the correct answer: The bond will issue for a premium, discount orface 2. Ultimate Butter Popcorn issues 6%, 10-year bonds with a face amount of$42,000. ne market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price will the mount ace amount i-annual Interest payment larket interest rate eriods to maturity ssue price Circle the correct answer: The bond will issue for a premium, discount or face? 3, Ultimate Butter Popcorn issues 6%, 15-year bonds with a face amount of $59,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid semiannually. At what price will the bonds issue? (rvof $1. PyofSI, EVAofSL and PVA ofSi) StoAed > poke nd Characteristics Amount ace amount i-annual Interest payment interest rate eriods to maturity e price Circle the correct answer: The bond will issue for a premium, discount or face?

Explanation / Answer

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SOLN 1 SOLN 2 SOLN 3 FACE VALUE (FV) 50,000 42,000 59,000 SEMI ANNUAL INT (PMT) 1,500 1,260 1,770 MKT INT RATE (I/Y) 3% 3.5% 2.5% PERIOD (N) 40 20 30 ISSUEPRICE (CPT PV) 50,000 39,015 65,174

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