Mind Explorers issues bonds with a stated interest rate of 7%, face value of $200,000, and due in 10 years. Interest payments are made semi-annually. The market rate for this type of bond is 6%. Using present value tables, calculate the issue price of the bonds.
A) $163,200.
B) $186,410.
C) $214,878.
D) $200,000.

Question

Quizplus · Accepted Answer

11ea937b_35f7_e394_a419_63bdc9eb7523_TB2599_00 ^¥$200,000 × 7% × ½ year = $7,000 *Table 2, i = 3%, n = 20 **Table 4, i = 3%, n = 20

Mind Explorers Issues Bonds with a Stated Interest Rate of 7