Compute the price of the bonds on their issue date.
A company issues bonds with a par value of $800,000 on their issue date. The bonds mature in 5 years and pay 6% annual interest in two semiannual payments. On the issue date, the market rate of interest is 8%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:
present value of an annuity for 10 periods at 3%... 8.5302
present value of an annuity for 10 periods at 4%... 8.1109
present value of 1 due in 10 oeriods at 3%... 0.7441
present value of 1 due in 10 periods at 4%... 0.6756
