Seth's grandmother gave him a $50 savings bond for his birthday.The bond pays $50 at maturity,which is in five years.If the interest rate is 5 per cent,the bond has a present value of $43.19.

Question

Quizplus · Accepted Answer

Using the formula for present value of a bond: 
Present Value = Face Value / (1 + interest rate)^time period 
We get: 
43.19 = 50 / (1 + 0.05)^5 
Solving for this equation gives a present value of $38.56, not $43.19. Therefore, the statement is false.

Seth's Grandmother Gave Him a $50 Savings Bond for His