Final answer:
The present value of Jalen Hurts's bond with a future value of $20,500, an interest rate of 5%, and a term of six years is approximately $15,293 when rounded to the nearest whole number.
Step-by-step explanation:
The question asks about calculating the present value of a bond given its future value, interest rate, and time to maturity. To calculate the present value of Jalen Hurts's bond, we use the formula for present value (PV) which is PV = FV / (1 + r)^n, where FV is the future value of the bond, r is the interest rate, and n is the number of periods until maturity. In this case, we have a future value (FV) of $20,500, interest rate (r) of 5% (or 0.05 in decimal form), and time to maturity (n) of six years.
Plugging the values into the formula, we get:
PV = $20,500 / (1 + 0.05)^6
PV = $20,500 / (1.05)^6
PV = $20,500 / 1.3401
PV = $15,293.25, which we round to the nearest whole number as $15,293.
Thus, the present value of Jalen Hurts's bond is $15,293.