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16-01-2020
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Suppose your uncle purchased a bond that pays $100 in 5 years. If the interest rate is 6%, what is the present value of the bond?a. -69. 37b. -74.73c. -97.54d. -87.35e. -80.11

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17-01-2020

Answer:

b. -74.73

Explanation:

In this question we need to find the price or present value of the bond. We know that the bond pays 100 in 5 years which means that the future value is 100, there are no payment so payments are 0, and the interest rate is 6%. We will input these values in a financial calculator and compute the PV.

FV= 100

PMT=0

I=6

N=5

Compute PV=-74.73

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