An Investor Purchases a 20-Year, $1,000 Par Value Bond That

Multiple Choice

An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

A) $828.
B) $1,686.
C) $1,000.
D) $893.