On December 31, 2008, University Theatres issued $500,000 face value of bonds. The stated rate is 6 percent, and interest is paid semiannually on June 30 and December 31. The bonds mature in 10 years.
Required:
If required, round your answers to the nearest whole dollar. Follow the format shown in present value tables as you complete the requirements below.
a. Assuming the market rate of interest is 4 percent, calculate at what price the bonds are issued.
b. Assuming the market rate of interest is 8 percent, calculate at what price the bonds are issued.