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In: Accounting

On January 1, Year 1, Camdenton Corporation issues $100,000 of 5% bonds maturing in 10 years...

On January 1, Year 1, Camdenton Corporation issues $100,000 of 5% bonds maturing in 10 years when the market rate of interest is 4%. Interest is paid semiannually on June 30 and December 31. When using the PV function in Excel to compute the issue price of the bonds, the applicable interest payment (“PMT”) is:

a. 2500

b. 4000

c. 5000

Solutions

Expert Solution

When using the PV function in excel to compute the issue of bond price, the PMT will be a.2500

That's, 100000*5%*6/12(semiannual interest payment)

PMT=2500

ekkarill92 answered 19 hours ago
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