You have a savings bond that will be worth $750 when it matures in 3 years,but you need cash today.If the current going rate of interest is 5%,what is your bond worth if you sell it today (rounded to the nearest dollar)?
A) $675
B) $648
C) $625
D) $612

Question

Quizplus · Accepted Answer

The value of the bond today can be calculated using the present value formula: PV = FV / (1 + r)^n, where PV is the present value (what the bond is worth today), FV is the future value ($750), r is the annual interest rate (5% or 0.05), and n is the number of years (3). Plugging in the numbers: PV = $750 / (1 + 0.05)^3 = $750 / 1.157625 = $647.75, which rounds to $648.

You Have a Savings Bond That Will Be Worth $750