Pearl Corporation issues $380,000 of 9% bonds, due in 10 years, with interest payable semi-annually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds.

the issue price of the bonds is $356,321.80.

Explanation:

The issue price of the bonds, PV can be determined using a Financial Calculator as follows :

Pmt = ($380,000 × 9%) ÷ 2 = $17,100

n = 10 × 2 = 20

P/yr = 2

YTM = 10%

Fv = $380,000

PV = ?

The issue price of the bonds, PV is $356,321.80

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"