Answer:
the current value of the bond is $665.05
Explanation:
The computation of the current value of the bond is shown below:
Current Value = Face value ÷ ( 1 + rate of interest)^time period
= $1,000 ÷ (1 + 0.085)^5
= $1,000 ÷ (1.085)^5
= $1,000 ÷ 1.503657
= $665.045423
= $665.05
hence, the current value of the bond is $665.05
We simply applied the above formula so that the correct value could come
And, the same is to be considered
