On January 1, a company issues 8%, 5-year, $300,000 bonds that pay interest semiannually. On the issue date, the annual market rate of interest is 6%. The following information is taken from present value tables: Present value of an annuity for 10 periods at 3%8.5302Present value of an annuity for 10 periods at 4%8.1109Present value of 1 due in 10 periods at 3%0.7441Present value of 1 due in 10 periods at 4%0.6756What is the issue (selling) price of the bond?
A. $300,010
B. $402,362
C. $325,592
D. $420,000
E. $308,107
Answer: C
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