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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
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Phoniex University
Oct-2001 - Nov-2016
Brief Exercise 10-3 Bond Issue Price
A bond payable is dated January 1, 2014, and is issued on that date. The face value of the bond is $100,000, and the face rate of interest is 8%. The bond pays interest semiannually. The bond will mature in five years.
Required
1.       What will be the issue price of the bond if the market rate of interest is 6% at the time of issuance?
2.       What will be the issue price of the bond if the market rate of interest is 8% at the time of issuance?
3.       What will be the issue price of the bond if the market rate of interest is 10% at the time of issuance?
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