Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
-To compute the price to pay for a bond, you use

Question

Use the present value and future value tables included in Appendix 8 and on the textbook companion website. 
-To compute the price to pay for a bond, you use

Quizplus · Accepted Answer

To compute the price to pay for a bond, we need to use both the present value of $1 concept and the present value of an annuity of $1 concept. The present value of $1 is used to calculate the value of the principal amount, and the present value of an annuity of $1 is used to calculate the value of the interest payments. Therefore, we need both concepts to calculate the total value of the bond.

Use the Present Value and Future Value Tables Included in Appendix