You have purchased a zero coupon bond that will pay $15,000 toyour newborn child in 21 years. If this bond is discounted at a rateof 2.875% per year, what is today's price (present value) for thisbond?A. $5,654B. $9,348.25C. $8,271.50D. $15,000

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Answered: You have purchased a zero coupon bond…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You have purchased a zero coupon bond that will pay $15,000 to your newborn child in 21 years. If this bond is discounted at a rate of 2.875% per year, what is today's price (present value) for this bond? A. $5,654 B. $9,348.25 C. $8,271.50 D. $15,000