Brooks Corporation issued $800,000 of 15-year bonds on January 1. The bonds pay interest on January 1 and July 1 with a stated annual rate of 8 percent.
If the market rate of annual interest at the time the bonds are sold is 6 percent, what will be the issue price of the bonds? (The answer assumes the use of a financial calculator. If PV tables are used, select the closest answer from the options provided.)

Question

Quizplus · Accepted Answer

11ee7640_e1c4_0b6b_90da_9bbb5bd12f2a_TBCB1007_00 N = (15 x 2) = 30 I = (6% / 2) = 3
Semi-annual interest payments: $800,000 x (0.08 x 1/2) = $32,000

Brooks Corporation Issued $800,000 of 15-Year Bonds on January 1