If PV tables are used, select the closest answer from the options provided.)
a. $1,738,786
b. $ 809,145
c. $956,804
d. $921,878
a. $1,738,786
b. $ 809,145
c. $956,804
d. $921,878
Answer:
c. $956,804
Explanation:
The computation of the issue price of the bond is as follows
Given that
Future value = $800,000
RATE = 6% ÷ 2 = 3%
PMT = $800,000 × 8% ÷ 2 = $32,000
NPER = 15 × 2 = 30
The formula is shown below
=-PV(RATE;NPER;PMT;FV;TYPE)
After applying the above formula, the present value is $956,804
hence, the issued price of the bond is $956,804
Therefore the correct option is c.
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