you are considering a savings bond that will pay $100 in 12years. if the interest rate...
you are considering a savings bond that will pay $100 in 12years. if the interest rate is 1.7% , what should pay today for the bond
Homework Answers
Period of Bond = 12 years
Interest Rate = 1.7%
Future Value = $100
PV of Bond = 100/(1+0.017)12
PV = $81.69
So, one should pay $81.69 for saving bond which will give $100 after 12 years.
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