Mind Explorers Issues Bonds with a Stated Interest Rate of 7

question 176

Multiple Choice

Mind Explorers issues bonds with a stated interest rate of 7%, face value of $200,000, and due in 10 years. Interest payments are made semi-annually. The market rate for this type of bond is 6%. Using present value tables, calculate the issue price of the bonds.

• A) $163,200.
• B) $186,410.
• C) $214,878.
• D) $200,000.

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Definitions:

Deed

A legal document that represents the ownership of real property or real estate and is used to transfer title from one party to another.

Real Property

Land and any permanent structures on it, including the air above and the ground below, along with certain rights like usage and leasing.

Conveys

To transfer or deliver something, such as property or information, from one person or entity to another.

Acknowledgement

Recognition of the importance or quality of something or the act of accepting the truth or existence of something.