Question
6. Suppose that on January 1, 2020, you buy a bond for $5,000 that pays interest of 6% per year compounded continuously. You never withdraw
6. Suppose that on January 1, 2020, you buy a bond for $5,000 that pays interest of 6% per year compounded continuously. You never withdraw any of the interest earned on the bond.
(a) (3 marks) What will the bond be worth on January 1, 2035?
(b) (4 marks) When will the bond be worth $17,000?
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Foundations Of Financial Markets And Institutions
Authors: Frank J Fabozzi, Franco G Modigliani, Frank J Jones
4th Edition
0136135315, 978-0136135319
