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Allisa [31]
3 years ago
10

You are purchasing a 30-year, zero coupon bond. The yield to maturity is 9.1% and the face value is $1,000. What is the current

market price
Business
1 answer:
madam [21]3 years ago
4 0

Answer:

Zero-cupon bond= $73.33

Explanation:

Giving the following information:

You are purchasing a 30-year, zero coupon bond. The yield to maturity is 9.1% and the face value is $1,000.

<u>To calculate the price of the bond, we need to use the following formula:</u>

Zero-cupon bond= [face value/(1+i)^n]

Zero-cupon bond= [1,000 / (1.091^30)]

Zero-cupon bond= $73.33

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In this case, since the check written and paid by the bank is $649 while in the company's book, it's written as $694, then a book balance of $45 is added which is the difference between $694 and $649

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A worker gets a raise of $120 per month and quickly decides to spend $90 of the money on necessities and the occasional luxury,
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