On december 31, 2021, interlink communications issued 5% stated rate bonds with a face amount of $115 million. the bonds mature on december 31, 2051. interest is payable annually on each december 31, beginning in 2022. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) (use appropriate factor(s) from the tables provided.) determine the price of the bonds on december 31, 2021, assuming that the market rate of interest for similar bonds was 6%. (round your final answers to nearest whole dollar amount.)

Ans. The price of the bonds on December 31, 2021 discounted at 6% is $99,170,444

Step-by-step explanation:

Hi, we need to use the following formula to find the present value of the bond, which is the same as saying, discount all future cash flows to present value.

Where:

r= discount rate (in our case 6% or 0.06)

Coupon =$115,000,000*0.05=$5,750,000

n= periods of payment (in our case, 30 years or just 30)

Everything should look like:

The price of the bond to the nearest whole dollar is $99,170,444

Best of luck.

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