The going rate of interest on a 5-year treasury bond is 4.25%. You have one that...
The going rate of interest on a 5-year treasury bond is 4.25%. You have one that will pay $3,525 five years from now. How much is the bond worth today?
Select the correct answer.
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Homework Answers
Value of Bond = CF * PVF(r%,n)
= $ 3525 * PVF(4.25%, 5)
= $3525 * 0.8121
= $ 2862.72
Option B is correct.
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