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Moss Co, issued $440,000 of five-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.

Moss Co, issued $440,000 of five-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Moss Co, issued $440,000 of five-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.
xhibit 5 Present Value of $1 at Compound Interest Periods 4% 1 2 3 4 5 6 7 8 9 10 - 12% 4½% 0.956940 5% 0.95238 0.915730 0.90703 0.96154 5½% 6% 0.94787 0.94340 0.89845 0.89000 10% 11% 0.90909 0.90090 0.89286 0.85161 0.83962 6½2% 7% 0.93897 0.93458 0.92456 0.88166 0.87344 0.82645 0.88900 0.876300 0.86384 0.82785 0.81630 0.75131 0.85480 0.838560 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301 0.82193 0.802450 0.78353 0.76513 0.74726 0.72988 0.71299 0.767900 0.74622 0.72525 0.70496 0.68533 0.66634 0.75992 0.734830 0.71068 0.68744 0.66506 0.64351 0.62275 0.73069 0.703190 0.67684 0.65160 0.62741 0.60423 0.58201 0.70259 0.672900 0.64461 0.61763 0.59190 0.56735 0.54393 0.67556 0.643930 0.61391 0.58543 0.55839 0.53273 0.50835 0.38554 0.35218 0.81162 0.79719 0.73119 0.71178 0.65873 0.63552 0.62092 0.59345 0.56743 0.79031 0.56447 0.53464 0.50663 0.51316 0.48166 0.45235 0.46651 0.43393 0.40388 0.42410 0.39092 0.36061 0.32197 13% 0.88496 0.78315 0.69305 0.61332 0.54276 0.48032 0.42506 0.37616 0.33288 0.29459
Transcribed Image Text:xhibit 5 Present Value of $1 at Compound Interest Periods 4% 1 2 3 4 5 6 7 8 9 10 - 12% 4½% 0.956940 5% 0.95238 0.915730 0.90703 0.96154 5½% 6% 0.94787 0.94340 0.89845 0.89000 10% 11% 0.90909 0.90090 0.89286 0.85161 0.83962 6½2% 7% 0.93897 0.93458 0.92456 0.88166 0.87344 0.82645 0.88900 0.876300 0.86384 0.82785 0.81630 0.75131 0.85480 0.838560 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301 0.82193 0.802450 0.78353 0.76513 0.74726 0.72988 0.71299 0.767900 0.74622 0.72525 0.70496 0.68533 0.66634 0.75992 0.734830 0.71068 0.68744 0.66506 0.64351 0.62275 0.73069 0.703190 0.67684 0.65160 0.62741 0.60423 0.58201 0.70259 0.672900 0.64461 0.61763 0.59190 0.56735 0.54393 0.67556 0.643930 0.61391 0.58543 0.55839 0.53273 0.50835 0.38554 0.35218 0.81162 0.79719 0.73119 0.71178 0.65873 0.63552 0.62092 0.59345 0.56743 0.79031 0.56447 0.53464 0.50663 0.51316 0.48166 0.45235 0.46651 0.43393 0.40388 0.42410 0.39092 0.36061 0.32197 13% 0.88496 0.78315 0.69305 0.61332 0.54276 0.48032 0.42506 0.37616 0.33288 0.29459
Periods 4% 1 2 3 4 5 6 7 8 9 10 Exhibit 7 Present Value of an Annuity of $1 at Compound Inte- 4½% 5% 0.95694 0.95238 1.87267 1.85941 5½% 6% 6½% 7% 10% 11% 12% 0.96154 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 1.88609 1.84632 1.83339 1.82063 1.80802 1.73554 1.71252 1.69005 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 2.48685 2.44371 2.40183 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 3.16987 3.10245 3.03735 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 3.79079 3.69590 3.60478 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 4.35526 4.23054 4.11141 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 4.86842 4.71220 4.56376 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 5.33493 5.14612 4.96764 7.43533 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 5.75902 5.53705 5.32825 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 6.14457 5.88923 5.65022 13% 0.88496 1.66810 2.36115 2.97447 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624
Transcribed Image Text:Periods 4% 1 2 3 4 5 6 7 8 9 10 Exhibit 7 Present Value of an Annuity of $1 at Compound Inte- 4½% 5% 0.95694 0.95238 1.87267 1.85941 5½% 6% 6½% 7% 10% 11% 12% 0.96154 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 1.88609 1.84632 1.83339 1.82063 1.80802 1.73554 1.71252 1.69005 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 2.48685 2.44371 2.40183 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 3.16987 3.10245 3.03735 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 3.79079 3.69590 3.60478 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 4.35526 4.23054 4.11141 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 4.86842 4.71220 4.56376 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 5.33493 5.14612 4.96764 7.43533 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 5.75902 5.53705 5.32825 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 6.14457 5.88923 5.65022 13% 0.88496 1.66810 2.36115 2.97447 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624
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