A zero coupon bond with a face value of 27,000 matures in 14 years. What should the bond be sold for now if its rate of return is to be 2.965% compounded annually?

Soluzione

A zero coupon bond with a face value of 27, 000 matures in 14 years. What should the bond be sold for now if its rate of return is to be 2.965% compounded annually?

Soluzione

Principal : 17935.32

Fasi della soluzione

Translate the problem into an equation:

27000 = P (1 + \frac{0.02965}{1})^{1 \cdot 14}

Risolvi per

P, 27000 = P (1 + \frac{0.02965}{1})^{1 \cdot 14} : P = 17935.32

Principal : 17935.32

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