Consider a bond that has a present value of $1,000.If the annual rate of interest is 7 percent, the future value of the bond after a year is
A)$930.00.
B)$934.58.
C)$1,000.00.
D)$1,070.00.

Question

Quizplus · Accepted Answer

The future value of the bond after a year can be calculated using the formula FV = PV*(1+r), where PV is the present value, r is the annual interest rate as a decimal, and FV is the future value. Plugging in the values, we get FV = 1000*(1+0.07) = $1,070.00. Therefore, the best choice is D.

Consider a Bond That Has a Present Value of $1,000