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Stockman Corp. purchased ten $1000, 8​% bonds of Power Source Corporation when the market rate of...

Stockman Corp. purchased ten $1000, 8​% bonds of Power Source Corporation when the market rate of interest was 6​%. Interest is paid​ semiannually, and the bonds will mature in ten years.

Using the PV function in Excel Superscript ®​, compute the price Stockman paid​ (the present​ value) for the bond investment.​ (Assume that all payments of interest and principal occur at the end of the period. Round your answer to the nearest​ cent.)

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Expert Solution

Solution:

Particualrs
Maturity value $10,000.00
Nos of interest period over life of bond 20
Stated rate per interest period 4.00%
effective-interest rate per each interest period 3.00%
payment amount per period $400.00
price Stockman paid​ (the present​ value) for the bond investment $11,488

ekkarill92 answered 7 months ago
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