Devine Divots Issued a Bond a Few Years Ago

Devine Divots issued a bond a few years ago. The bond has a face value equal to $1,000 and pays investors $30 interest every six months. The bond has eight years remaining until maturity. If an investor requires a 7 percent rate of return to invest in this bond, what is the maximum price the investor should be willing to pay to purchase the bond?

A) $761.15
B) $939.53
C) $940.29
D) $965.63
E) $1,062.81

Correct Answer:

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