On January 1, 2012, Water Wonderland issues $20 million of 8% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year.
1. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
2. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
3. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.

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The Answer of On January 1, 2012, Water Wonderland issues $20 million of 8% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year.
1. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
2. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
3. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.

On January 1, 2012, Water Wonderland Issues $20 Million of 8