A Government bond, issued many years ago with a nominal value of 100, promises to pay interest of 4 per annum indefinitely into the future (it has no...

A Government bond, issued many years ago with a nominal value of £100, promises to pay

interest of £4 per annum indefinitely into the future (it has no redemption date). If the

longterm interest rate has increased since the board was issued and is now 6 per cent, and is

not expected to change, determine a value for the bond.