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marks People Window Help Neff Secure I https://www.matod.com/Student/PlayerHomework.aspx?homeworkldnd650378 18&questionId;=1&flushed.false; SAM 3100 Online Spring 2017-2018 Abby Neff Homework: Chapter 3 Homework Score: 0 of 1 pt P 3-15 (similar to) |2 of 18 (10 complete) HW Score: 4 You are considering a savings bond that will pay $100 in 11 years lfte interest rate is 2.1%, what should you pay today for the bond? The amount that you should pay tiday for the bond is (Round to the nearest cent) Enter your answer in the answer box and then click Check Answer All parts showing Clear Al

Solution

This can be solved using the present value formula,

Future value is = Present value *(1+r)^n

Future value is $100

r is Rate of interest = 2.1%

n is Number of years is = 11 years

Using the above information, this can be solved as

100 = Present value *(1+0.021)^11

Present value is = 100/1.256849

Present value is $ 79.56/-

The amount that you should pay today for the bond is $ 79.56/-