What is the current price of a zero-coupon bond with a 7 percent yield to maturity that matures in 20 years?
A) $1,000
B) $2,582
C) $25.82
D) $258.42
E) $100.00

Question

Quizplus · Accepted Answer

The price of a zero-coupon bond can be calculated using the formula: Price = Maturity Value / (1 + yield to maturity)^(number of years to maturity). Assuming a maturity value of $1,000 (a common face value for bonds), the calculation is $1,000 / (1 + 0.07)^20 = $258.42.

What Is the Current Price of a Zero-Coupon Bond with a 7