Question

# Sunland Company issued 6%, 9-year, \$290,000 par value bonds that pay interest annually on April 1....

Sunland Company issued 6%, 9-year, \$290,000 par value bonds that pay interest annually on April 1. The bonds are dated April 1, 2022, and are issued on that date. The discount rate of interest for such bonds on April 1, 2022, is 8%.

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What cash proceeds did Sunland receive from issuance of the bonds? (Round answer to 0 decimal places, e.g. 125.)

 Cash proceeds from issuance of the bonds

You are purchasing a car for \$44,000, and you obtain financing as follows: \$2,800 down payment, 12% interest, semiannual payments over 5 years.

Compute the payment you will make every 6 months. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 52.75.)

 Payment

 1 Cash proceeds from issuance of the bonds 253768 or 253769
 Workings: Annual interest 17400 =290000*6% Amount PV factor 8% Present value Annual interest 17400 6.24689 108696 Principal 290000 0.50025 145073 Total 253768 PV factor 8% Annual interest 6.24689 =(1-(1.08)^-9)/0.08 Principal 0.50025 =1/1.08^9
 2 Price of Car 44000 Less: Down payment 2800 Amount of financing 41200 Divide by PV factor 7.36009 =(1-(1.06)^-10)/0.06 Payment 5597.76

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