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7 May, 15:44

Suppose an Exxon Corporation bond will pay $4,500 ten years from now. If the going interest rate on safe 10-year bonds is 4.25%, how much is the bond worth today? a. $2,967.92 b. $3,116.31 c. $3,272.13 d. $3,435.74 e. $2,819.52

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  1. 7 May, 16:29
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    The answer is a. $2,967.92

    Explanation:

    Calculation of prent value

    Present value = p * (1+i) ^-10

    Present value = $4,500 * (1+0.0425) ^-10 = $2,967.92
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