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A Bond Promises to Pay $500 in One Year and $10,500

Question 380

Multiple Choice

A bond promises to pay $500 in one year and $10,500 in two years. What is the correct way to find the present value of this bond?

A) $5001 + r) + $10,500/1 + r) 2
B) $500/1 + r) + $10,500/1 + r) 2
C) $11,000/1 + r) 2
D) $5001 + r) + $10,5001 + r) 2

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