On January 1, a company issues bonds dated January 1 with a par value of $220,000. The bonds mature in 3 years. The contract rate is 6.0%, and interest is paid semiannually on June 30 and December 31. The market rate is 7.0%. Using the present value factors below, the issue (selling) price of the bonds is: n= i= Present Value of an Annuity(series of payments) Present value of 1(single sum)3 6.0?% 2.6730? 0.8396?6 3.0?% 5.4172? 0.8375?3 7.0?% 2.6243? 0.8163?6 3.5?% 5.3286? 0.8135?
A. $35,169.
B. $220,000.
C. $214,139.
D. $225,861.
E. $178,970.
Answer: C
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