# accounting

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a 10 year bond pays 8% on a face value of \$1000. If similar bonds are yeilding 10%, what is the market value of the bond. use annual analysis

• accounting -

The formula is:
PV of the principle, \$1,000
Plus the PV of the interest

Are you using Present Value Tables?
PV of the principle comes from the PV of \$1.

PV of the interest is one years' interest and the factor from he PV of annuity table.

Use the 10% column from the table for 10 periods.

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