Calculate the price of a zero coupon bond with yield to maturity of 8.75%,a face value of $1000,and maturing in 5 years.
A) $1000
B) $756.43
C) $675.44
D) $435.12
E) $875.14

Name: Calculate the price of a zero coupon bond with yield to maturity of 8.75%,a face value of $1000,and maturing in 5 years. A) $1000 B) $756.43 C) $675.44 D) $435.12 E) $875.14
Brand: Quizplus
Rating: 4.9 (38 reviews)

Question

Quizplus · Accepted Answer

Solve for P
P = 1000/(1 + .0875)⁵
P = $657.44

Calculate the Price of a Zero Coupon Bond with Yield