On January 1, 2017, Ellison Co. issued eight-year bonds with a face value of $6,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:
Present value of 1 for 8 periods at 6% .......................................... .627
Present value of 1 for 8 periods at 8% .......................................... .540
Present value of 1 for 16 periods at 3% ........................................ .623
Present value of 1 for 16 periods at 4% ........................................ .534
Present value of annuity for 8 periods at 6% ................................ 6.210
Present value of annuity for 8 periods at 8% ................................ 5.747
Present value of annuity for 16 periods at 3% .............................. 12.561
Present value of annuity for 16 periods at 4% .............................. 11.652
The present value of the principal is
a. $3,204,000.
b. $3,240,000.
c. $3,738,000.
d. $3,762,000.
