This Excel exercise involves costing out the annual debt service requirements for a GO bond issue and an analysis of the effect of those annual payments on the operating budget. The dataset is actual annual payments of principal and interest for a 20-year bond issue. The data can be used to determine the annual cost of debt service, the required tax rate needed to produce the revenue for the debt service fund, and the amount of new debt capacity that becomes available as the old debt is paid down. This advanced exercise introduces the basics of selling municipal bonds, the time value of money, and requires computation of the average interest cost, the true interest cost, and the present value of the debt service payments.  Download detailed instructions and data set for this exercise.