Emily Is Contemplating the Purchase of a 20-Year Bond That

Emily is contemplating the purchase of a 20-year bond that pays $50 interest every six months. The face value of the bond is $1,000. She plans to hold the bond for 10 years and sell it. She requires a 12 percent annual return but believes that the market will give only an 8 percent return when she sells the bond 10 years from now. Assuming she is a rational investor, how much should she be willing to pay for the bond today?

A) $1,126.85
B) $885.30
C) $737.50
D) $927.68
E) $856.91