On January 1, 20x8, Xeraz Corporation issued $1,000,000 5 year bonddated Jan 1, 20x8 with interest payable on July 1 and Jan 1. The bonds had a face interest rate of 5%. The effective interest rate in the market is 8%. The company fiscal year end is December 31, 2008.
Question: Calculate the present value of the bond issue to determine its selling price.