Cider a bond that promises to pay 100 in one year , Microeconomics

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Cider a bond that promises to pay 100 in one year

Consider a bond that promises to pay $100 in one year.

a. What is the interest rate on the bond if its price today is $75? $85? $95?

b. What is the relation between the price of the bond and the interest rate?

c. If the interest rate is 8%, what is the price of the bond today?

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Microeconomics: Cider a bond that promises to pay 100 in one year

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Microeconomics: Cider a bond that promises to pay 100 in one year

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