Bon Vivant has just issued bonds whose face value on the market is $200,000. The bonds mature in 10 years and carry an interest rate of 5%. Interest is payable semi annually. The market rate is 4%. Assignment: a. What price will an investor be willing to pay for this Bond? (Show calculations using Appendix E Tables or using the calculator) b. If the market rate was 6%, explain how it will affect the issue price of the Bond.

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Bon Vivants Bond Price Calculation a Price with Market Rate of 4 Method 1 Using Appendix E Tables Pr... View the full answer