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Marmalice Co Present Value of a $1 at Compound Interest

Question 137

Short Answer

Marmalice Co. issued $4,000,000 of five-year, 10 percent bonds, with interest payable semiannually, at a market (effective) interest rate of 11 percent. Determine the present value of the bonds payable using the present value tables. Round to the nearest dollar.

Present value of an annuity of $1 at compound interest:
 Periods4.0%4.5%5.0%5.5%6.0%6.5%7.0%10.%11.0%12.0%13.0%0.9610.9560.9520.9470.9430.9380.9340.9090.9000.8920.884154943887409758099086961.8861.8721.8591.8461.8331.8201.8081.7351.7121.6901.668209674132396302545205102.7752.7482.7232.6972.6732.6482.6242.4862.4432.4012.361309962593014832857183153.6293.5873.5453.5053.4653.4253.3873.1693.1023.0372.974490539515118021874535474.4514.3894.3294.2704.2124.1554.1003.7903.6953.6043.517582984828366820799078235.2425.1575.0754.9954.9174.8414.7664.3554.2304.1113.997614876953320154265441556.0025.8925.7865.6825.5825.4845.3894.8684.7124.5634.422705703797385229422076616.7326.5956.4636.3346.2096.0885.9715.3345.1464.9674.798874892157797530931264777.4357.2687.1076.9526.8016.6566.5155.7595.5375.3285.131933798220691023020525668.1107.9127.7217.5377.3607.1887.0236.1445.8895.6505.426109072736309835857232224\begin{array}{ccccccc}\text { Periods}&\mathbf{4 . 0 \%} & \mathbf{4 . 5 \%} & \mathbf{5 . 0 \%} & \mathbf{5 . 5 \%} & \mathbf{6 . 0 \%} & \mathbf{6 . 5 \%} & \mathbf{7 . 0 \%}&10.\%&11.0\%&12.0\%&13.0\% \\&0.961 & 0.956 & 0.952 & 0.947 & 0.943 & 0.938 & 0.934 & 0.909 & 0.900 & 0.892 & 0.884 \\1&54 & 94 & 38 & 87 & 40 & 97 & 58 & 09 & 90 & 86 & 96\\&1.886 & 1.872 & 1.859 & 1.846 & 1.833 & 1.820 & 1.808 & 1.735 & 1.712 & 1.690 & 1.668 \\2&09 & 67 & 41 & 32 & 39 & 63 & 02 & 54 & 52 & 05 & 10\\&2.775 & 2.748 & 2.723 & 2.697 & 2.673 & 2.648 & 2.624 & 2.486 & 2.443 & 2.401 & 2.361 \\3&09 & 96 & 25 & 93 & 01 & 48 & 32 & 85 & 71 & 83 & 15\\&3.629 & 3.587 & 3.545 & 3.505 & 3.465 & 3.425 & 3.387 & 3.169 & 3.102 & 3.037 & 2.974 \\4&90 & 53 & 95 & 15 & 11 & 80 & 21 & 87 & 45 & 35 & 47\\&4.451 & 4.389 & 4.329 & 4.270 & 4.212 & 4.155 & 4.100 & 3.790 & 3.695 & 3.604 & 3.517 \\5&82 & 98 & 48 & 28 & 36 & 68 & 20 & 79 & 90 & 78 & 23\\&5.242 & 5.157 & 5.075 & 4.995 & 4.917 & 4.841 & 4.766 & 4.355 & 4.230 & 4.111 & 3.997 \\6&14 & 87 & 69 & 53 & 32 & 01 & 54 & 26 & 54 & 41 & 55\\&6.002 & 5.892 & 5.786 & 5.682 & 5.582 & 5.484 & 5.389 & 4.868 & 4.712 & 4.563 & 4.422 \\7&05 & 70 & 37 & 97 & 38 & 52 & 29 & 42 & 20 & 76 & 61\\&6.732 & 6.595 & 6.463 & 6.334 & 6.209 & 6.088 & 5.971 & 5.334 & 5.146 & 4.967 & 4.798 \\8&74 & 89 & 21 & 57 & 79 & 75 & 30 & 93 & 12 & 64 & 77\\&7.435 & 7.268 & 7.107 & 6.952 & 6.801 & 6.656 & 6.515 & 5.759 & 5.537 & 5.328 & 5.131 \\9&33 & 79 & 82 & 20 & 69 & 10 & 23 & 02 & 05 & 25 & 66\\&8.110 & 7.912 & 7.721 & 7.537 & 7.360 & 7.188 & 7.023 & 6.144 & 5.889 & 5.650 & 5.426 \\10&90 & 72 & 73 & 63 & 09 & 83 & 58 & 57 & 23 & 22 & 24\end{array}
Present value of a $1 at compound interest:
 Periods4.0%4.5%5.0%5.5%6.0%6.5%7.0%10.%11.0%12.0%13.0%0.9610.9560.9520.9470.9430.9380.9340.9090.9000.8920.884154943887409758099086960.9240.9150.9070.8980.8900.8810.8730.8260.8110.7970.783256730345006644456219150.8890.8760.8630.8510.8390.8270.8160.7510.7310.7110.693300308461628530311978050.8540.8380.8220.8070.7920.7770.7620.6830.6580.6350.613480567022093290017352320.8210.8020.7830.7650.7470.7290.7120.6200.5930.5670.542593455313268899924543760.7900.7670.7460.7250.7040.6850.6660.5640.5340.5060.480631902225963334476463320.7590.7340.7100.6870.6650.6430.6220.5130.4810.4520.425792836844065175166635060.7300.7030.6760.6510.6270.6040.5820.4660.4330.4030.376869198460412301519388160.7020.6720.6440.6170.5910.5670.5430.4240.3900.3600.332959906163903593109261880.6750.6430.6130.5850.5580.5320.5080.3850.3520.3210.294105693914339733554189759\begin{array}{ccccccc}\text { Periods}&\mathbf{4 . 0 \%} & \mathbf{4 . 5 \%} & \mathbf{5 . 0 \%} & \mathbf{5 . 5 \%} & \mathbf{6 . 0 \%} & \mathbf{6 . 5 \%} & \mathbf{7 . 0 \%}&10.\%&11.0\%&12.0\%&13.0\% \\& 0.961 & 0.956 & 0.952 & 0.947 & 0.943 & 0.938 & 0.934 & 0.909 & 0.900 & 0.892 & 0.884 \\1 & 54 & 94 & 38 & 87 & 40 & 97 & 58 & 09 & 90 & 86 & 96\\& 0.924 & 0.915 & 0.907 & 0.898 & 0.890 & 0.881 & 0.873 & 0.826 & 0.811 & 0.797 & 0.783 \\2 & 56 & 73 & 03 & 45 & 00 & 66 & 44 & 45 & 62 & 19 & 15\\& 0.889 & 0.876 & 0.863 & 0.851 & 0.839 & 0.827 & 0.816 & 0.751 & 0.731 & 0.711 & 0.693 \\3 & 00 & 30 & 84 & 61 & 62 & 85 & 30 & 31 & 19 & 78 & 05\\& 0.854 & 0.838 & 0.822 & 0.807 & 0.792 & 0.777 & 0.762 & 0.683 & 0.658 & 0.635 & 0.613 \\4 & 80 & 56 & 70 & 22 & 09 & 32 & 90 & 01 & 73 & 52 & 32\\& 0.821 & 0.802 & 0.783 & 0.765 & 0.747 & 0.729 & 0.712 & 0.620 & 0.593 & 0.567 & 0.542 \\5 & 93 & 45 & 53 & 13 & 26 & 88 & 99 & 92 & 45 & 43 & 76\\& 0.790 & 0.767 & 0.746 & 0.725 & 0.704 & 0.685 & 0.666 & 0.564 & 0.534 & 0.506 & 0.480 \\6 & 31 & 90 & 22 & 25 & 96 & 33 & 34 & 47 & 64 & 63 & 32\\& 0.759 & 0.734 & 0.710 & 0.687 & 0.665 & 0.643 & 0.622 & 0.513 & 0.481 & 0.452 & 0.425 \\7 & 92 & 83 & 68 & 44 & 06 & 51 & 75 & 16 & 66 & 35 & 06\\& 0.730 & 0.703 & 0.676 & 0.651 & 0.627 & 0.604 & 0.582 & 0.466 & 0.433 & 0.403 & 0.376 \\8 & 69 & 19 & 84 & 60 & 41 & 23 & 01 & 51 & 93 & 88 & 16\\& 0.702 & 0.672 & 0.644 & 0.617 & 0.591 & 0.567 & 0.543 & 0.424 & 0.390 & 0.360 & 0.332 \\9 & 59 & 90 & 61 & 63 & 90 & 35 & 93 & 10 & 92 & 61 & 88\\& 0.675 & 0.643 & 0.613 & 0.585 & 0.558 & 0.532 & 0.508 & 0.385 & 0.352 & 0.321 & 0.294 \\10 & 56 & 93 & 91 & 43 & 39 & 73 & 35 & 54 & 18 & 97 & 59\end{array}

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