Answer:
Answer is given below.
Explanation:
Solution 1:
Chart Values are based on:
n= (15 Years*2) 30 Half years
i= (7%/2) 3.50% Semi annual
Cash Flow Table Value * Amount = Present Value
Principal 0.356278 * $7,90,000 = $2,81,460
Interest (Annuity) [$790,000*7%*6/12] 18.392045 * $27,650 = $5,08,540
Price of Bonds $7,90,000
Bond Amortization Schedule
Date Cash interest Interest Expense Chanage in Carrying Value Carrying value
01-Jan-21 $7,90,000
30-Jun-21 $27,650 $27,650 $0 $7,90,000
31-Dec-21 $27,650 $27,650 $0 $7,90,000
Solution 2:
Chart Values are based on:
n= (15 Years*2) 30 Half years
i= (8%/2) 4.00% Semi annual
Cash Flow Table Value * Amount = Present Value
Principal 0.308319 * $7,90,000 = $2,43,572
Interest (Annuity) [$790,000*7%*6/12] 17.292033 * $27,650 = $4,78,125
Price of Bonds $7,21,696
Bond Amortization Schedule
Date Cash interest Interest Expense Change in Carrying Value Carrying value
01-Jan-21 $7,21,696
30-Jun-21 $27,650 $28,868 $1,218 $7,22,914
31-Dec-21 $27,650 $28,917 $1,267 $7,24,181
Solution 3:
Chart Values are based on:
n= (15 Years*2) 30 Half years
i= (6%/2) 3.00% Semi annual
Cash Flow Table Value * Amount = Present Value
Principal 0.411987 * $7,90,000 = $3,25,470
Interest (Annuity) [$790,000*7%*6/12] 19.600441 * $27,650 = $5,41,952
Price of Bonds $8,67,422
Bond Amortization Schedule
Date Cash interest Interest Expense Change in Carrying Value Carrying value
01-Jan-21 $8,67,422
30-Jun-21 $27,650 $26,023 -$1,627 $8,65,794
31-Dec-21 $27,650 $25,974 -$1,676 $8,64,118
