The Principal Amount Is $80,000, the Stated Rate Is 10

question 144

Multiple Choice

The principal amount is $80,000, the stated rate is 10%, and the term of the bond is 8 years. The bond pays interest semiannually. At the time of issue, the market rate is 9%. What is the present value of the bond at the market rate?

• A)$84,456
• B)$44,936
• C)$40,160
• D)$87,290

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Definitions:

Obtaining Funds

The act of securing financial resources for personal or business needs through various means such as loans, investments, or grants.

Public Accountant

A certified professional who provides accounting services to the public, including auditing, taxation, and financial consulting.

Auditing Services

Professional services that examine and verify the accuracy of financial records and statements of a company.

Investing Activities

Financial transactions related to the acquisition or disposal of long-term assets and other investments not included in cash equivalents.