Compute the maximum amount an investor should pay

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Reference no: EM131969119

Problem

R. J. Winter co. recently issued $100,000, 10-year deferred interest bonds. The bonds have a stated rate of 10%, and interest is to be paid in 10 semiannual payments beginning in Year 6. The Market rate of interest on the date of issuance was 8%.

1) Compute the maximum amount an investor should pay for these bonds.

2) Prepare a bond amortization schedule for R.J. Winter, assuming the effective-interest method is used.

Reference no: EM131969119

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