Final answer:
Jane needs to calculate the present value of the future cash flow to determine how much she should pay now for a bond that will mature to $5,000 in 6 years. Additional information about the interest rate is needed to determine the exact amount.
Step-by-step explanation:
If Jane wants to buy a bond that will mature to $5,000 in 6 years, she needs to calculate the present value of the future cash flow using the concept of time value of money. The present value formula can be used to determine the amount she should pay now.
- Using the present value formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.
- Since Jane will receive $5,000 in 6 years and we don't have the interest rate, we cannot calculate the exact present value amount.
- To choose the correct answer from the given options, we need additional information about the interest rate. Without this information, it is not possible to determine the exact amount she should pay now.