Roderick received a $100 savings bond for his graduation.The bond pays $100 at maturity,which is in 5 years.If the interest rate is 6 per cent,the bond has a present value of $90.09.

Question

Quizplus · Accepted Answer

The present value of the bond can be calculated using the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years. Plugging in the given values, we get: PV = 100 / (1 + 0.06)^5 = $74.73. Therefore, the statement is false.

Roderick Received a $100 Savings Bond for His Graduation