Question

Last year, Brian bought a bond for $10,000 that promises to pay him $800 per year. This year, he can buy a bond for $10,000 that promises to pay $900 per year. If Brian wants to sell his old bond, what is its price likely to be?

Answer 1

the price likely to be $8,889

Step-by-step explanation:

The computation of the price likely to be is shown below:

The rate of interest in the last year

= $800 ÷ $10,000

= 8%

Now this year the rate of interest it would be

= $900 ÷ $10,000

= 9%

Now the price likely to be is

= $800 ÷ 9%

= $8,889

hence, the price likely to be $8,889

hence, the same is to be considered