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What is the market value of a bond that has a required rate of return of 10% p

Finance

What is the market value of a bond that has a required rate of return of 10% p.a. and pays $50 p.a. with only two years remaining to maturity, if the redemption value is $1000 and the initial market value of the bond was $850 when it was first issued eight years ago?

Question 5 options:

 

1) $571.80

 

2) $1421.80

 

3) $826.45

 

4) $913.22

Option 1

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