Question

Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 18...

Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 18 years, for $213.80. Zero coupon bonds pay the investor the face value on the maturity date. What is the implicit interest in the first year of the bond's life?
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Hence, Implicit interest in first year was $19.13 ($213.8*8.95%).

Add a comment
Know the answer?
Add Answer to:
Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 18...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT