1. A company may look to raise additional money by issuing bonds. A bond has two cash flo streams: (1) the periodic interest payments that are an annuity, and (2) the principal repayment at maturity that is a lump-sum. When a company issues bonds, they are recorde at the present value of these two cash flow streams as a liability on the balance sheet. ABC Company issues $100,000 of bonds due in 10 years. The bonds pay $10,000 of inte annually. The current market rate of interest is 8%. Required: a. Determine the present value of the periodic interest payments.