13.mp4 connect ACCT 230 ACC 230 Question 2 (of 1 Save&ExtSubmit; GMAT Corpornon

Question

13.mp4 connect ACCT 230 ACC 230 Question 2 (of 1 Save&ExtSubmit; GMAT Corpornon parning to sue bonds win·face vann of$258 000 and a o upon rate of 5 percent The bonds matre in 7 years and pay interest semanaly every J,e30and Decenter 31 All of the bonds were sold on January 1 of this year Detemine the issuance price of the bonds assuming an annual market rate of interest of 7.5 percent (FY of S1.PV of S1.EVA of $1, and PVA of Use the appropriate factorts) from the tables provided Round your final answer to whole dollars

Explanation / Answer

Issue price = (Semi-annual interest payment x PVA3.75%,14) + (Face value x PV3.75%,14)

= ($258000 x 5% x 6/12 x 10.73962) + ($258000 x 0.59726)

= $223364

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