Question

Suppose a State of New York bond will pay $1,000 ten years from now.

If the going interest rate on these 10-year bonds is 5.0%, how much is the bond worth today?

Answer 1

Amount of worth of bond after 10 tear will be $1628.89

Step-by-step explanation:

We have given principal amount that new York bond will pay = $1000

Time n = 10 years

Rate of interest = 5 %

We have to find the worth of the bond after 10 year

We know that present value is given by

`A=P(1+(r)/(100))^n=1000(1+(5)/(100))^(10)=$1628.89`

So the amount of bond after 10 year will be $1628.89