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RideAnS [48]
3 years ago
6

Akers Company sold bonds on July 1, 20X1, with a face value of $100,000. These bonds are due in 10 years. The stated annual inte

rest rate is 6% per year, payable semiannually on June 30 and December 31. These bonds were sold to yield 8%. By July 1, 20X2, the market yield on these bonds had risen to 10%.
Required:
What was the bonds' market price on July 1 20x2?
Business
1 answer:
Taya2010 [7]3 years ago
6 0

Answer:

$76,620.83

Explanation:

According to the scenario, computation of the given data are as follows

Future Value (FV) = $100,000

Rate of interest = 10% yearly

Rate of interest (Rate) = 10%÷ 2 = 5% semiannually

Number of period (Nper) = 9 × 2 = 18

Face value = $100,000

Payment (pmt) = $100,000 × (6%÷2) = $3,000

By putting the value in excel present value formula, we get,

PV = $76,620.83

Attachment is attached below

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