A Bond Promises to Pay $1,000 20 Years from Today

question 68

Multiple Choice

A bond promises to pay $1,000 20 years from today.No interest will be paid on the bonds during the 20 years If the interest rate is 7%,what is the bond's present value?

• A) $50
• B) $258.42
• C) $629.56
• D) $1,000

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Definitions:

Deductive Reasoning

A logical process wherein a conclusion is based on the concordance of multiple premises that are generally assumed to be true.

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Post-formal Thought

is an advanced stage of cognitive development, following Piaget's formal operational stage, characterized by complex, reflective, and contextual thinking.

Abstract

A summary of a research paper's contents, providing an overview of the study, results, and conclusions.