Today is January 1.The interest rate is 8% and investors are convinced that it will stay at 8% for the next 10 years.A corporate bond comes on the market that for the next 7 years will pay $160 on December 31 to whoever owns the bond on that date.On January 1, 7 years from today, the issuer of the bond will redeem the bond by buying it back from the bondholder for $2,000.What should this bond sell for?
A)$3,120
B)$2,160
C)$1,600
D)$2,000
E)$2,780

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The Answer of Today is January 1.The interest rate is 8% and investors are convinced that it will stay at 8% for the next 10 years.A corporate bond comes on the market that for the next 7 years will pay $160 on December 31 to whoever owns the bond on that date.On January 1, 7 years from today, the issuer of the bond will redeem the bond by buying it back from the bondholder for $2,000.What should this bond sell for?
A)$3,120
B)$2,160
C)$1,600
D)$2,000
E)$2,780

Today Is January 1