You have a bond that entitles you to a one-time payment of $10,000 one year from now.The interest rate is 10 percent per year.How much is the bond worth today?
A)$9,090.91
B)$10,000.00
C)$8,264.46
D)$9,523.81

Question

Quizplus · Accepted Answer

Using the present value formula: 
PV = FV / (1 + r)^n 
where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods, we can find the bond's worth today: 
PV = 10,000 / (1 + 0.10)^1 = $9,090.91. Therefore, the best choice is A.

You Have a Bond That Entitles You to a One-Time