Question

Ten years ago, Ann was gifted a bond. If the investment earned an annual interest of 3.2% compounded quarterly for the life of the bond and it is worth $4,805.02 today, how much was the original gifted bond worth?

Answer 1

The original worth of the bond is $1363.04.

What was the original value of the bond?

The formula that can be used to determine the original value of the bond is:

PV = FV ÷ (1 + r)^nm

Where:

• PV = present value
• FV = future value
• r = interest rate
• n = number of years
• m = number of compounding

4,805.02 ÷ (1.032)^(4x10) = $1363.04

To learn more about present value, please check: brainly.com/question/25748668