GMAT Corporation is planning to issue bonds with a face value of $254,000 and a

Question

GMAT Corporation is planning to issue bonds with a face value of $254,000 and a coupon rate of 4 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Determine the issuance price of the bonds assuming an annual market rate of interest of 6.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Answer is complete but not entirely correct. Issue price 218,479

Explanation / Answer

Amount PV factor Present value Semi annual interest 5080 14.87747 75578 Principal 254000 0.55368 140635 Issue price 216212 Answer might vary + 1

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