Asked by Stacy
What is the present value of a $1000 bond which pays $50 a year for 10 years, starting one year from now? Assume interest rate is 6% per year, compounded annually
Answers
Answered by
Reiny
PV = 50 [ 1 - 1.06^-10]/.06 + 1000(1.06)^-10
= 926.40
= 926.40
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