What is the value of a zero-coupon bond with a par value of $1,000 and a yield to maturity of 6.60%? The bond has 19 years to ma

Question

3 years ago

9

turity.

1 answer:

stepan [7] · Answer 1 · 2022-08-01T02:15:27+03:00

Answer:

$296.90

Explanation:

For computing the value of the zero coupon bond we need to apply the present value formula i.e to be shown in the attachment below:

Given that,

Future value = $1,000

Rate of interest = 6.60%

NPER = 19 years

PMT = $0

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the value of zero coupon bond is would be $296.90