WEEK SIX

Hartford Research issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $29,000 par value and an annual contract rate of 8%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.)

Required:

Consider each of the following three separate situations.

1.	The market rate at the date of issuance is 6%.

(a)

Complete the below table to determine the bonds' issue price on January 1, 2015.

Table values are based on:
n =
i =	3.0%
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value		$29,000
Interest (annuity)
Price of bonds			$33,315

2.	The market rate at the date of issuance is 8%.

(a)	Complete the below table to determine the bonds' issue price on January 1, 2015.

Table values are based on:
n =
i =	8.0%
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest (annuity)
Price of bonds

3.The market rate at the date of issuance is 10%.

(a)	Complete the below table to determine the bonds' issue price on January 1, 2015.

Table values are based on:
n =
i =
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest (annuity)
Price of bonds

PLEASE ANSWER EACH QUESTION CORRECTLY FILL IN THE BLANKS WITH CORRECT ANSWERS