What is the present value of a savings bond with a 7.8 percent APR compoundedcontinuously if it is to have a value of $12,500 in 12 years?A $1,076.25B $8,754.38C$4,902.42D $31,872.02

The objective of this question is to find the present value of a savings bond that is compounded continuously at a given interest rate and is to have a certain value in a specified number of years.The formula for the present value (PV) of a future sum of money compounded continuously is given by: PV = FV * e^(-rt), where FV is the future value, r is the annual interest rate (expressed as a decimal), t is the time in years, and e is the base of the natural logarithm (approximately equal to 2.71828).In this case, the future value (FV) is $12,500, the annual interest rate (r) is 7.8 percent or 0.078, and the time (t) is 12 years. Substituting these values into the formula gives: PV = $12,500 * e^(-0.078*12).Using a scientific calculator, we find that e^(-0.078*12) is approximately equal to 0.392. Therefore, the present value (PV) is approximately equal to $12,500 * 0.392 = $4,900.Therefore, the present value of the savings bond is approximately $4,900. The closest answer choice to this value is C) $4,902.42.The present value of a savings bond with a 7.8 percent APR compounded continuously that is to have a value of $12,500 in 12 years is approximately $4,900. The closest answer choice to this value is C) $4,902.42.