Pre-Calculus

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What is the present value of a $1000 bond which pays $50 a year for 10 years, starting one year from now? Assume interest rate is 6% per year, compounded annually

  • Pre-Calculus -

    PV = 50 [ 1 - 1.06^-10]/.06 + 1000(1.06)^-10
    = 926.40

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