The Face Value Is $82,000,the Stated Rate Is 10%,and the Term

question 43

Multiple Choice

The face value is $82,000,the stated rate is 10%,and the term of the bond is eight years.The bond pays interest semiannually.At the time of issue,the market rate is 8%.What is the present value of the bond at the issue date?
Present value of $1:

Present value of ordinary annuity of $1:

• A)$91,561
• B)$47,773
• C)$43,673
• D)$84,788

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Definitions:

Urban Wage Earner

An individual who earns their living through employment in an urban area, typically referring to workers in non-agricultural jobs.

Average Income

The sum of all incomes in a particular group divided by the number of individuals in that group, often used to indicate economic health.

Minimum Food Budget

The lowest estimated amount of money required to cover the cost of food necessities for an individual or household.

Transfer Payments

Payments made by governments to individuals without any expectation of a direct economic return, such as welfare benefits, social security, and subsidies.