Seaside issues a bond that has a stated interest rate of 10%, face amount of $50,000, and is due in 5 years. Interest payments are made semi-annually. The market rate for this type of bond is 12%. What is the issue price of the bond?
A) $83,920.
B) $46,320.
C) $53,605.
D) $50,000.

Question

Quizplus · Accepted Answer

11ea937b_35f7_203c_a419_b58614e5e24e_TB2599_00 * PV an ordinary annuity of $1: n = 10; i = 6%
**PV of $1: n = 10; i = 6%

Seaside Issues a Bond That Has a Stated Interest Rate