karleighgiles8117 karleighgiles8117

05-02-2020
Business

contestada

You are considering a savings bond that will pay $ 100 in 9 years. If the interest rate is 1.9 %, what should you pay today for the bond?

Respuesta :

Karabo99 Karabo99

05-02-2020

Answer:

You should pay $84.42 today for the bond.

Explanation:

bond price = value of bond/[(1 + interest rate)^number of years]

= $100/[(1 + 1.9%)^9]

= $100/(1.185)

= $84.42

Therefore, You should pay $84.42 today for the bond.

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