On January 1, 2016, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $270,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows (FV of $1 (http://lectures.mhhe.com/connect/0077782801/Images/FV%20of%20$1.jpg), PV of $1 (http://lectures.mhhe.com/connect/0077782801/Images/PV%20of%20$1.jpg), FVA of $1 (http://lectures.mhhe.com/connect/0077782801/Images/FVA%20of%20$1.jpg), PVA of $1 (http://lectures.mhhe.com/connect/0077782801/Images/PVA%20of%20$1.jpg), FVAD of $1 (http://lectures.mhhe.com/connect/0077782801/Images/FVAD%20of%20$1.jpg) and PVAD of $1 (http://lectures.mhhe.com/connect/0077782801/Images/PVAD%20of%20$1.jpg)) (Use appropriate factor(s) from the tables provided.):










January 1, 2016
11.0
%


June 30, 2016
12.0
%


December 31, 2016
14.0
%








Required:


1.
Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2016 (ignoring brokerage fees).

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