Toni Francesca B.

Marquez
BSA – 3A

1) $7,000 for 10 years from now at 7% is worth how much today?

7000/(1.07^10)= $3,558.45

2) A 9% $100,000 bond is prepared in December 2018. By the time the bond is offered

to investors on January 1, 2019 the market interest rate has increased to 10%. The

date of the bond is January 1, 2019 and it matures on December 31, 2023. The bond

will pay interest of _______.

 $4,500 (9% x $100,000 x 6/12 of a year on each June 30 and December 31 OR $9,000 each year.