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On January 1, 2018, Water Wonderland issues $20 million of 7% bonds, due in seven years,...

On January 1, 2018, Water Wonderland issues $20 million of 7% bonds, due in seven years, with interest payable semiannually on June 30 and December 31 each year. Use Table 2 and Table 4.

   

1. If the market rate is 6%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.

2. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.

3. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.

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ekkarill92 answered 1 year ago
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