# economics present value question

*label*Economics

*timer*Asked: Feb 25th, 2015

**Question description**

1. Assume the US Government issues a bond to you, promising to pay you $500 exactly 5 years from now?

a. What is the present value of that bond if the market interest rate is 10%

b. What is the present value of that bond if the market interest rate is 4%

c. What is the present value of that bond if the market interest rate is 1%