Final answer:
The present value of a State of California bond that pays $1,000 in eight years with an interest rate of 7.3% is calculated using the present value formula, resulting in a value of $581.97, which doesn't match any provided options. This might require recalculating or a revision of the question or data.
Step-by-step explanation:
To calculate the present value of a State of California bond that will pay $1,000 eight years from now with an interest rate of 7.3%, we use the present value formula which is PV = FV / (1 + r)^n, where PV is present value, FV is future value, r is the interest rate (as a decimal), and n is the number of periods.
Plugging the given numbers into the formula, we get:
PV = $1,000 / (1 + 0.073)^8
Therefore:
PV = $1,000 / (1.073)^8
PV = $1,000 / 1.71899
PV = $581.97, which is not among the provided options. It is important to ensure all calculations are correct and double-check for any potential computational errors. Since none of the provided answers match the calculated value, it might be necessary to revisit the question or consult additional resources.