Question

Interest rates determine the present value of future amounts (Round to the nearest dollar.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the loon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements: Requirement 1. Determine the present value of seven-year bonds payable with face value of $92,000 and stated interest rate of 14%, perd semiannually. The market rate of interest is 14% at issuance. (Round intermediary calculations and final answer to the nearest whole dolar) Present Value When market rate of interest is 14% annually Enter any number in the edit fields and then click Check Answer parts Check Answer 2 remaining 0 0

Answer 1

Requirement 1:

=PV(rate,per,pmt,fv)

=PV(14%/2,7*2,14%/2*92000,92000)

=92000

Requirement 2:

=PV(rate,per,pmt,fv)

=PV(16%/2,7*2,14%/2*92000,92000)

=84415

Requirment 3:

=PV(rate,per,pmt,fv)

=PV(12%/2,7*2,14%/2*92000,92000)

=100551

Where,

rate is periodic rate

nper is number of periods

pmt is periodic payments

fv is futre value