How Much Is a Bond Worth If It Pays $55

question 74

Multiple Choice

How much is a bond worth if it pays $55 per year in interest forever and the market interest rate is 8%?

• A) $440
• B) $687.50
• C) $787.60
• D) $1,250

Analyzing the impact of false memories on jurors and trial outcomes.

Understanding the concepts of disposable income, consumption, saving, and their respective relationships.

Identifying the contributions of key economists to the development of consumption function theories.

Analyzing the trends in consumer spending on different categories of goods and services over time.

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Definitions:

Nearest Cent

Rounding a monetary amount to the closest one-hundredth of the currency unit, such as a dollar.

Semiannual Compounding

Another term for compounded semi-annually, indicating that interest is added to the principal sum twice per year.

Nearest Cent

Rounding a monetary amount to the closest one-hundredth of a currency unit.

Future Value

The value of an investment or asset at a specific future date, considering factors like interest rates or earnings growth.