On January 1, 2020, Bonds with a Face Value of $72,000

question 73

Multiple Choice

On January 1, 2020, bonds with a face value of $72,000 were sold. The bonds mature on January 1, 2030. The face interest rate is 6%. The bonds pay interest semiannually on July 1 and January
1) The market rate of interest is 10%. What is the market price of the bonds? The present value of
$1 for 20 periods at 5% is 0.377. The present value of an ordinary annuity of $1 for 20 periods at
5% is 12.462. The present value of $1 for 20 periods at 3% is 0.554. The present value of an
Ordinary annuity of $1 for 20 periods at 3% is 14.878. (Round your final answer to the nearest
Dollar.)

• A) $72,000
• B) $72,024
• C) $54,062
• D) $74,160

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Definitions:

Conflagration Insurance

Insurance coverage designed to protect against losses from large and intensive fires that consume a wide area and a large amount of property.

Property Damage

Harm or destruction that affects the value or use of physical property.

Personal Injuries

Physical or emotional harm caused to an individual, often leading to legal action in order to receive compensation.

Appraisal Clause

A provision in insurance policies requiring disputes over the value of a claim to be resolved by an independent appraiser.