Calculate Present Value (PV) of a Bond: N=4, FV=$1000, PMT=$50, I=6%

To calculate the present value (PV) of a bond, we need the following information: the number of periods (N), the face value (FV), the coupon payment per period (PMT), and the interest rate per period (I).

Given: N = 4 (number of periods) FV = $1000 (face value) PMT = $50 (coupon payment per period) I = 6% (interest rate per period)

We can use the present value of an ordinary annuity formula to calculate the PV of the bond. The formula is as follows:

PV = (PMT / I) * (1 - (1 + I)^(-N)) + (FV / (1 + I)^N)

Let's calculate the PV using the given values:

PV = ($50 / 6%) * (1 - (1 + 6%)^(-4)) + ($1000 / (1 + 6%)^4)

PV = ($50 / 0.06) * (1 - (1.06)^(-4)) + ($1000 / (1.06)^4)

PV = ($833.33) * (1 - 0.79209) + ($793.83)

PV = $166.67 + $793.83

PV = $960.50

Therefore, the present value (PV) of the bond is $960.50.