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On January 1, 2017, Swifty Corporation issued eight-year bonds with a face value of $5550000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:
| Present value of 1 for 8 periods at 6% | 0.627 | ||
| Present value of 1 for 8 periods at 8% | 0.540 | ||
| Present value of 1 for 16 periods at 3% | 0.623 | ||
| Present value of 1 for 16 periods at 4% | 0.534 | ||
| Present value of annuity for 8 periods at 6% | 6.210 | ||
| Present value of annuity for 8 periods at 8% | 5.747 | ||
| Present value of annuity for 16 periods at 3% | 12.561 | ||
| Present value of annuity for 16 periods at 4% | 11.652 |
The present value of the interest is
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| $1913751. |
| $2091407. |
| $1940058. |
| $2067930. |
Expert Answer
| $1,940,058. | |
| Please find below the answer and please give thumbs up | |
| Statementshowing Computations | |
| Paticulars | Amount |
| Face Value of bonds | 5,550,000.00 |
| Interest per half year = 5550,000*3% | 166,500.00 |
| No of periods = 8 *2 | 16.00 |
| Present value of annuity for 16 periods at 4% | 11.652 |
| present value of the interest = 166,500 * 11.652 | 1,940,058.00 |
