jhjkhbk4601 jhjkhbk4601

21-01-2020
Business

contestada

What is the present value (aka price) of a 20-year, pure discount bond (zero coupon bond) that pays $1000 at maturity if it is priced to yield 7.62% per year (YTM)

Respuesta :

shahzaibnaeem37 shahzaibnaeem37

22-01-2020

Answer:

The present value/ Price of the bond is $230.21

Explanation:

The bond has a future value of 1,000 which means it will pay 1,000 when it matures, also there are no payments in between as this is a pure discount bond. In order to find the present value/price we will have to discount 1000 by the current interest rate and 20 years back.

Present value = Future value/(1+Interest rate)^N

Future value = 1,000

Interest rate = 7.62%

N= 20

1000/(1.0762)^20

PV= 230.21

Answer Link

Otras preguntas

A phone company offers two monthly plans. Plan A costs $24 plus an additional $0.09 for each minute of calls. Plan B costs $20 plus an additional $0.14 for each

HELP ASAP!!! The border states were important as a buffer for the union from the confederacy. Why was it important that Maryland stay in the control of the Uni

find the excluded values

The coordinates of the vertices of trapezoid ABCD are A (2,6), B (5,6), C (7,1), and D (-1,1). The coordinates of the vertices of trapezoid A'B'C'D' are A' (-6,

∆ABC is transformed with the center of dilation at the origin. Pre-image: ∆ABC with vertices A(−5, −4), B(−7, 3), C(3, −2) Image: ∆A'B'C' with vertices A' (−

plsssssssss helpppppppppp

V/-6 +2=-1 what does v equal

plsssssssss helpppppppppp

Equizelent kxbekd .org be f me d

Which of the following taxes is deducted every time you receive a paycheck? sales tax income tax property tax paycheck tax