Compute the value of a bond


What is the value of a bond that matures in 20 years, makes anannual coupon payment of $40, and has a par value of $1,000? Assume a required rate of return of 10%, and round your answer to the nearest $10.

a. $410

b. $490

c. $500

d. $520

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Finance Basics: Compute the value of a bond
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