What will be the price of a bond with face value Rs 1000 carrying a coupon of I0% maturing in 3 years at I0% premium on par value? Present value factor and PVAF at 10% for 3 years is .7513 and 2.4869 respectively.
a)826.43
b)1348.69
1075.12
1000
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The time value of money is the degree to which cash available today is worth more than the identical sum at some point in the future, due to its potential for growth. ... When investing in bonds, for example, the interest increases the value of deposited cash over time if left reinvested.
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