Answer:
Ans. Effective annual rate=1.8928%
Annual Compound semi-annually=1.8839%
Step-by-step explanation:
Hi, this is the formula to find the effective annual rate for this zero-coupon bond.
![EffectiveAnnualRate=\sqrt[n]{\frac{FaceValue}{Price} } -1](https://tex.z-dn.net/?f=EffectiveAnnualRate%3D%5Csqrt%5Bn%5D%7B%5Cfrac%7BFaceValue%7D%7BPrice%7D%20%7D%20-1)
n= years to maturity
That is:
![EffectiveAnnualRate=\sqrt[8]{\frac{50,000}{43,035} } -1=0.018928](https://tex.z-dn.net/?f=EffectiveAnnualRate%3D%5Csqrt%5B8%5D%7B%5Cfrac%7B50%2C000%7D%7B43%2C035%7D%20%7D%20-1%3D0.018928)
Means that the effective interest rate is 1.8928% effective annual
Now, let´s find the compound interest rate.
First, we have to turn this rate effective semi-annually

0.942% effective semi annual
To turn this into a semi-annual, compounded semi-annually, we just have to multiply by 2, so we get.
1.8839% compounded semi-annually
Best of luck