You are considering investing in a zero-coupon bond that will pay you its face value of $1000 in twelve years. If the bond is currently selling for $496.97, then the internal rate of return (IRR) for investing in this bond is closest to ________.
A) 5.0%
B) 7.1%
C) 6.0%
D) 8.2%

Question

Quizplus · Accepted Answer

C) PV = -496.97
FV = 1000
PMT = 0
N = 12
Compute I = 6.0%.

You Are Considering Investing in a Zero-Coupon Bond That Will