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Calculate current market value of bonds; prepare an amortization table for a loan

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13) The Corporation has 1,000,000 of 8% bonds outstanding. Interest is payable each July and January 1 and the maturity date is 10 years from today. If the current market rate of interest is 10%, what is the current market value of the bonds?

14) The Corporation has just borrowed $100,000 from the bank. The term of the loan is five years, and the interest rate is 9%. The loan is due in 5 equal annual installments at the end of each year. Complete the following amortization table.

Year Loan amount Pymt Interest Amoritzation

1

2

3

4

5

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With both narrative statements and formulas, the solution calculates the answers to the two problems.

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13) The Corporation has 1,000,000 of 8% bonds outstanding. Interest is payable ...

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Manal Elkhoshkhany, MBA
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  • MBA, California State University, Sacramento
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