Determine the present value of the bond


Problem:

A bond maturing in 10 years pays $80 each year (including year 10) and $1,000 upon maturity. Assuming 10 percent to be the appropriate discount rate, the present value of the bond is:

  • $877.11
  • $1,000.00
  • $416.39
  • $1,785.67

Note: Explain all steps comprehensively.

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Finance Basics: Determine the present value of the bond
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