The Chestnut Street Company plans to issue a bond semiannually on March 31st and September 30th....
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The Chestnut Street Company plans to issue a bond semiannually on March 31st and September 30th. The Controller has asked you to calculate information about the bond assuming two different market interest rates. Use the information included and the Excel functions described below to complete the task. Information relating to this bond is found below: Face Value: Number of Years: Stated Interest Rate: Number of Payments per Year: $ 825,000 10 7% 2 1) Assume the Market Interest Rate is: 8% a. How many total payments or periods will this bond pay interest? b. Calculate the amount of interest that will be paid on March 31st. c. Calculate the selling price of this bond using the PV Function. d. Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. 2) Assume the Market Interest Rate is: 6% a. Calculate the amount of interest that will be paid on March 31st. b. Calculate the selling price of this bond using the PV Function. c. Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. ####: 20 ############# The Chestnut Street Company plans to issue a bond semiannually on March 31st and September 30th. The Controller has asked you to calculate information about the bond assuming two different market interest rates. Use the information included and the Excel functions described below to complete the task. Information relating to this bond is found below: Face Value: Number of Years: Stated Interest Rate: Number of Payments per Year: $ 825,000 10 7% 2 1) Assume the Market Interest Rate is: 8% a. How many total payments or periods will this bond pay interest? b. Calculate the amount of interest that will be paid on March 31st. c. Calculate the selling price of this bond using the PV Function. d. Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. 2) Assume the Market Interest Rate is: 6% a. Calculate the amount of interest that will be paid on March 31st. b. Calculate the selling price of this bond using the PV Function. c. Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. ####: 20 #############
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