Solved: Computing the price paid on the bond investment, Financial Accounting

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Computing the price paid on the bond investment

Response to the following problem:

Calculate the present value of a bond investment

Donte Corp. purchased 10, $1,000, 5% bonds of General Electric Corporation when the market rate of interest was 4%. Interest is paid semiannually on the bonds, and the bonds will mature in six years. Using the PV function, compute the price Donte paid (the present value) on the bond investment.

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Financial Accounting: Computing the price paid on the bond investment

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