Part 1

On April 1, 2020, ET Inc. has available for issue $820,000 bonds due in four years. Interest at the rate of 4.50% is to be paid quarterly. Calculate the issue price if the market interest rate is:

a. 5.50%

b. 4.50%

c. 3.50%

Part 2

On October 1, ET Inc. has available for issue a $327,000 bond due in eight years. Interest at the rate of 6.50% is to be paid semiannually. Calculate the issue price if the market interest rate is:

a. 5.50%

b. 6.50%

c. 7.25%