What is the market value of a bond that has a required rate of return of 10% p.a. and pays $50 p.a. with only two years remaining to maturity, if the redemption value is $1000 and the initial market value of the bond was $850 when it was first issued eight years ago?

Question 5 options:

1)

$571.80

2)

$1421.80

3)

$826.45

4)

$913.22