I need Help!!!

Clancey Inc. issues $2,100,300 of 7% bonds due in 14 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 11%. What amount will Clancey receive when it issues the bonds?

Question

I need Help!!!

Clancey Inc. issues $2,100,300 of 7% bonds due in 14 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 11%. What amount will Clancey receive when it issues the bonds?

anonymous · Answer

please help

anonymous · Answer

That is too specific for financial math. I guess you have to calculate the discount because the earning is lower than 11%.

anonymous · Answer

So the discount is 7/11 = 0.6363 and the answer is 2,100,300 x 7/11 = 1336554.54

anonymous · Answer

But I am not sure of that.

anonymous · Answer

answer was 1,513,731 but thank you for atleast trying

anonymous · Answer

Oh, I didn't take into account the 14 years, it can have something to do with that difference.

anonymous · Answer

You are welcome.