1. A company borrowed $300,000 cash from the bank by signing a 5-year, 8% installment note. The present value factor for an annuity at 8% for 5 years is 3.9927. Each annuity payment equals $75,137. The present value of the note is: Show your calculations.
A. $75,137
B. $94,013
C. $300,000
D. $375,685
E. $1,197,810
2. A company issues at 9% bonds at par with a par value of $100,000 on April 1, which is 4 months after the most recent interest date. How much total cash interest is received on April 1 by the bond issuer? Show your calculations.
A. $750
B. $5,250
C. $1,500
D. $3,000
E. $6,000