Question: 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. Calculate 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?