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problem: On January 1, 2006, Central City issued a twenty year serial bond to finance improvements to the water distribution system. A total of $80,000,000 face values of bonds were issued with coupon and maturity rates as follows:

December 31-Dec-10

3.00%

$5,000,000

December 31-Dec-15

3.50%

$5,000,000

December 31,2020

4.00%

$10,000,000

December 31-Dec-21

4.10%

$10,000,000

December 31-Dec-22

4.20%

$10,000,000

December 31-Dec-23

4.30%

$10,000,000

December 31-Dec-24

4.40%

$15,000,000

December 31-Dec-25

4.50%

$15,000,000

Central City received 80,500,000 dollar from the bond issue. Use a spreadsheet program to find the NIC and TIC interest rates for the bond issue. find out the values for NIC and TIC be if the interest rate were 4.2% for the bonds with a maturity before 2020 & 5% for the bonds with a maturity of 2020 or later?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918820

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