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Cambridge Corporation Issued $1,200,000 of 7% Bonds That Mature in Five

Question 21

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Cambridge Corporation issued $1,200,000 of 7% bonds that mature in five years. Compute the bond issue price assuming that the market rate for similar bonds is:
a. 8% per year compounded annually (and interest is paid annually)
b. 10% per year compounded semi-annually (and interest is paid semi-annually)

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