BUSA 101

CHAPTER 13: EXTRA PRACTICE

ISSUANCE OF A BOND

SCHMIDT

 

 

QUESTIONS

 

 

Determine the selling price (present value) for the following bonds.

 

1.          A $10,000, 5 year, 11% bond is sold when interest rates are 12%. The bond pays interest semiannually.

 

2.          A $50,000, 8-year, 14% bond is sold when market interest rates are 13%. The bond pays interest semiannually.