Multiple Choice
On January 1,2014,bonds with a face value of $100,000 were sold.The bonds mature on January 1,2024.The stated rate of interest is 9% annually.The bonds pay interest semiannually on July 1 and January 1.The market rate of interest is 10% annually.What is the market price of the bonds? The present value of 1 for 20 periods at 5% is 0.377.The present value of an ordinary annuity of $1 for 20 periods at 5% is 12.462.The present value of 1 for 10 periods at 10% is 0.386.The present value of an ordinary annuity of $1 for 10 periods at 10% is 6.145.
A) $93,779
B) $93,905
C) $100,000
D) $102,000
Correct Answer:
Verified
Correct Answer:
Verified
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