Question

How much will the bond be worth when Elena is 20 years old?

A) $287.50
B) $297.50
C) $307.50
D) $317.50

Answer 1

The bond will be worth less than $10,000 when Elena is 20 years old due to the change in interest rates.

Step-by-step explanation:

The bond will be worth less than $10,000 when Elena is 20 years old due to the change in interest rates. When interest rates increase, the price of the bond decreases. This is because investors can find other bonds with higher interest rates, making the lower interest rate bond less desirable. Therefore, the bond will be worth less than its original value of $10,000.