Tampa Company plans to issue $100,000 par value, 10 year bonds with a stated interest rate of 10%. Interest is paid annually.

If, on the date of issuance, the market rate of interest is 8%, the price of the bonds might be?



I have the answer, it's 113,550. I just don't understand how they come up with that answer.
Thanks for the help.

If you'll present-value all of the bond's cash flows at the 8% market discount rate, you'll come up with that price. (Actually they must have done a bit o' rounding--or used a 'present value factor' table--because the answer's closer to 113,420.)

I don't understand where to even start though. Could someone do the steps so I can see how to do it and then apply it to my other problems.

Please see these threads:

https://www.askmehelpdesk.com/financ...ds-200150.html
https://www.askmehelpdesk.com/financ...ce-199941.html