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What Is the Present Value of A $1000\$ 1000 Bond Which Pays

Question 60

Multiple Choice

What is the present value of a $1000\$ 1000 bond which pays $40\$ 40 each year for 15 years, with the first payment one year from now? Assume the interest rate is 5.5\% per year compounded annually.


A) $849.44\$ 849.44
B) $401.50\$ 401.50
C) $856.16\$ 856.16
D) $843.07\$ 843.07

Correct Answer:

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