Question

suppose an apple corporation bond will pay 4500 ten years from now if the going interest rate on safe 10 year bonds is 4.25 how much is the bond worth today

Answer 1

The bond is currently valued $2287.51.

We have $4500 as the bond's future value (Future Value, or FV) after ten years.

Years 10

7% is the standard rate.

To determine the bond's current price, we must discount the bond's face value (FV) over a 10-year period by a discount factor set at 7%.

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