A company issued 7%, 9year bonds with a face amount of $84 million. The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually.

A company issued 7%, 9year

bonds with a face amount of $84 million. The market yield for bonds of

similar risk and maturity is 8%. Interest is paid semiannually.

Use (Table 2) and (Table 4)

At what price did the bonds sell? (Enter your answer in dollars not in millions. Round "PV Factor" to

5 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your

response.)

Price of the bonds $ 78,683,262 ± 0.01%

Explanation:

Interest $ 2,940,000 ¥ × 12.65930* = $37,218,342

Principal $84,000,000 × 0.49363** = 41,464,920

Present value (price) of the bonds $ 78,683,262

¥ [7 ÷ 2] % × $84,000,000

* present value of an ordinary annuity of $1: n = 18, i = 4.0%. (Table 4)

** present value of $1: n = 18, i = 4.0%. (Table 2)