Air Destinations issues bonds due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds.
A) $537,194.
B) $464,471.
C) $359,528.
D) $500,000.

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Quizplus · Accepted Answer

11ea937b_35f7_bc81_a419_452c2c4e54e9_TB2599_00 ^¥$500,000 × 6% × ½ year = $15,000 *Table 2, i = 3.5%, n = 20 **Table 4, i = 3.5%, n = 20

Air Destinations Issues Bonds Due in 10 Years with a Stated