Question

Suppose an Exxon Corporation bond will pay $4,500 ten years from now. If the going interest rate on safe 10-year bonds is 4.25%, how much is the bond worth today? a. $2,967.92 b. $3,116.31 c. $3,272.13 d. $3,435.74 e. $2,819.52

Answer 1

The answer is a. $2,967.92

Step-by-step explanation:

Calculation of prent value

Present value = p* (1+i)^-10

Present value = $4,500 * (1+0.0425)^-10= $2,967.92