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Marat540 [252]
3 years ago
13

Suppose a State of Nevada bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, h

ow much is the bond worth today
Business
1 answer:
spayn [35]3 years ago
8 0

Answer:

$651.60

Explanation:

the worth of the bond today can be determined by calculating the present value of the bond's cash flow

Present value is the sum of discounted cash flows

Present value = cash flow / (1 + r)^n

r = interest rate

n = years

1000 / ( 1.055)^8 = $651.60

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