Question

Rhonda purchased a ​%, ​zero-coupon bond with a ​-year maturity and a ​$ par value years ago. The bond matures tomorrow. How much will Rhonda receive in total from this​ investment, assuming all payments are made on these bonds as​ expected?

Answer 1

Answer:

$15,000

Explanation:

Complete question "Rhett purchased a 12% zero-coupon bond with a 15-year maturity and a $15,000 par value 15 years ago. The bond matures tomorrow. How much will Rhett receive in total from this investment, assuming all payments are made on these bonds as expected?"

Zero Coupon Bonds means exactly what the name carries and suggested "Zero Coupon (Interest) bonds".

This Coupon Bond pays no interest to the bond holders and are issued at deep discount to its face value.

Zero Coupon Bonds are matured at par value, meaning the maturity amount to the paid is equals to the par value. In other word, the bondholders will get only Par Value of the bond at maturity.

So here, Rhett will receive on maturity date the amount of $15,000.