Compute the Present Value of a Bond: the Principal Amount

question 143

Multiple Choice

Compute the present value of a bond: The principal amount is $140,000,the stated rate is 9%,and the term of the bond is 4 years.The bond pays interest semiannually.At the time of issue,the market rate is 8%.Please compute the present value of the bond at market rate using the present value tables.

• A) $144,758
• B) $42,418
• C) $102,340
• D) $142,000

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Definitions:

George Grenville

A British Whig statesman who served as Prime Minister of Great Britain from 1763 to 1765, known for his role in passing the Stamp Act, which contributed to the American Revolution.

North American Colonies

The North American Colonies refer to the territories in North America that were colonized by European powers from the 16th century, leading to the formation of countries like the United States and Canada.

Native Americans

Refers to the indigenous peoples of the Americas, present before the arrival of European explorers and settlers.

Pontiac's Uprising

A rebellion led by the Ottawa leader Pontiac in 1763, uniting Native American tribes against British post-colonial policies in the Great Lakes region.