Question

Trizcinky invested a bond with no interest and with a principal of $10,000 at maturity, 9 years from now. According to the risk of the bond it shoudl yeild 11 percent, coumpounded annually. What should be th current makret price of this bond?

Answer 1

$3,909.30

Step-by-step explanation:

Current Price = Principal Amount/{(1+r)^{n}}

Current Price = $10,000 / (1+11%)^9

Current Price = $10,000 / 2.5580

Current Price = $3909.304144

Current Price = $3,909.30

So, the current market price of this bond is $3,909.30.