Navistar Electric issued 1000 debenture bonds 2 years ago with a face value of $5,000 each and a bond interest rate of 15% per year payable semiannually. The bonds have a maturity date of 20 years from the date they were issued. If the interest rate in the market place is 10% per year compounded semiannually, determine the present worth today of one bond.

$7,081.25

Explanation:

Face value = 5000

Coupon = 15% paid annually. Semi annual payment = 750/2 = 375

Time to maturity = 18 years

Interest rate = 10% compounded semi-annually

P = 375(P|A, 5%, 36) + 5000(P|F, 5%, 36)

P = 375(16.58131488) + 5000(0.17265193)

P = 6217.99308 + 863.25965

P = 7081.25273

P = $7,081.25

So, the present worth of one bond today is  $7,081.25

d. low interest rates

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.