A zero coupon bond has a face value of $1,000 and matures in 4 years. Investors require a (n) 6.1% annual return on these bonds. What should be the selling price of the bond? (Round to the nearest cent)

Thank you for the opportunity to help you with your question!

A zero coupon bond is a bond that makes no periodic interests but it is sold at a discount from face value.

Selling price =M/(1+r)^n

where ;M=maturity value.

r=investor required anual yield /2

n=number of years till maturity

price=1000*(1+0.0305)^4=1127.6958

to the nearest cents=1127.70

Hey Ellery ,I might go offline soon.However at any time am availble for further discussion.Even now.Nice time.

States this is incorrect

What is incorrect, can I upload a referrence for you,or I can explain where you did not get

The value 0.0305 is coming from 6.1%/2=3.05%=3.05/100=0.0305

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