How Much Is a Bond That Pays $20 in Interest

question 20

Multiple Choice

How much is a bond that pays $20 in interest payments for 4 years and $1000 at the end of the fourth year worth if the interest rate is 5%?

• A)$822.70
• B)$893.62
• C)$1070.92
• D)$1080

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Definitions:

Steel

An alloy of iron and carbon, and sometimes other elements, used as a primary material in buildings, infrastructure, tools, ships, automobiles, machines, appliances, and weapons.

Automobiles

Motor vehicles designed and manufactured to transport individuals or small groups of people.

Oranges

A citrus fruit known for its juicy segments and sweet to slightly sour taste, often consumed fresh or squeezed for juice.

Peaches

A sweet, juicy fruit with fuzzy skin and a stone or pit in the center, commonly eaten fresh or used in cooking and baking.