Suppose you are deciding whether to buy a particular bond. if you buy the bond and hold it for 4 years, then at that time you will receive a payment of $10,000. if the interest rate is 6 percent, the present value of the bond is econ

The present value of the bond is $7,921

Explanation:

PV: present value

FV: future value

Assuming you are buying a zero coupon value:

If the interest rate is 6% (0.06), after the first year the amount should become FV1 = PV x (1+0.06) for principal an interest.

All of that should earn interest in the second year to become FV2 = FV1 x (1+0.06) = PV x

At the end of four years the value of the bond should be PV x

=> PV = $10,000/ = $7,921