A zero-interest bond pays $200,000 in 10 years. What amount would you be willing to pay to acquire the bond today if you want to earn a return of approximately 4%? Use the present value table of $1 provided. (Do not round any intermediary calculations, and round your final answer to the nearest dollar.)
Excerpt of Present Value of $1 Table
$$\begin{array} { | c | c | }
\hline \text { Periods } & \mathbf { 4 } \% \
\hline 1 & 0.96154 \
\hline 2 & 0.92456 \
\hline 3 & 0.88900 \
\hline 4 & 0.85480 \
\hline 5 & 0.82193 \
\hline 6 & 0.79031 \
\hline 7 & 0.75992 \
\hline 8 & 0.73069 \
\hline 9 & 0.70259 \
\hline 10 & 0.67556 \
\hline
\end{array}$$

Question

A zero-interest bond pays $200,000 in 10 years. What amount would you be willing to pay to acquire the bond today if you want to earn a return of approximately 4%? Use the present value table of $1 provided. (Do not round any intermediary calculations, and round your final answer to the nearest dollar.) 
Excerpt of Present Value of $1 Table
$$\begin{array} { | c | c | } 
\hline \text { Periods } & \mathbf { 4 } \% \
\hline 1 & 0.96154 \
\hline 2 & 0.92456 \
\hline 3 & 0.88900 \
\hline 4 & 0.85480 \
\hline 5 & 0.82193 \
\hline 6 & 0.79031 \
\hline 7 & 0.75992 \
\hline 8 & 0.73069 \
\hline 9 & 0.70259 \
\hline 10 & 0.67556 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The present value of the bond is $135,112. This is calculated by multiplying the future value of the bond ($200,000) by the present value factor for 10 years at 4% (0.67556).

A Zero-Interest Bond Pays $200,000 in 10 Years A) $120,000 B) $164,386 C) $134,594 D) $135,112

A Zero-Interest Bond Pays $200,000 in 10 Years A) $120,000
B) $164,386
C) $134,594
D) $135,112