An engineer planning for his retirement thinks that the rates of return in the marketplace will decrease before he retires. Therefore, he plans to invest in corporate bonds. He plans to buy a $50,000 bond that has a coupon rate of 12% per year payable quarterly with a maturity date 20 years from now. 

How much should he be able to sell the bond for in 5 years if the market rate of return is 8% per year compounded quarterly?

Answer rating: 100% (QA)

To calculate the value of the bond after 5 years we need to determine the present value of the bonds ... View the full answer