rm a issues a bond today it will pay $100,000 on the bond which includes 3% interest in one year how much will firm a recieve for the bond today
rm a issues a bond today it will pay $100,000 on the bond which includes 3% interest in one year how much will firm a recieve for the bond today
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
firm a issues a bond today it will pay $100,000 on the bond which includes 3% interest in one year how much will firm a recieve for the bond today
Expert Solution
Step 1
The bond Price after one year is $100,000 which includes a 3% interest rate.
Assume at the present bond value is only 100%. after one year its value will be 100 + 3 = 103%
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