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moss co. issued $42,000,000 of five-year, 11% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. determine the present value of the bonds payable using the present value tables in exhibit 5 and exhibit 7. round to the nearest dollar. $fill in the blank 1

Sagot :

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The present value of the bonds payable using the present value tables in exhibit 5 and exhibit 7 is $45,323,443.20  

The present value of the bonds consist of the present value of the semiannual interest payment

i.e$42,000,000*11%*6/12=$2,310,000.00

The semiannual payment would be multiplied by the annuity for ten periods

(5 years *2) using 4.5% (11%/2)   which is 7.91272

present value of semiannual interest payment

=7.91272 *2,310,000.00=$ 18,278,383.20  

Present value of face value in after 10 periods

=0.64393 *$42,000,000=$ 27,045,060.00  

Total present value

=$ 27,045,060.00+$18,278,383.20

=$45,323,443.20

To know more about present value, refer:

https://brainly.com/question/16676955

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