Homework Question help Needed

Accounting
Tutor: None Selected Time limit: 1 Day

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)

Jul 1st, 2015

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The price of a zero-coupon bond can be calculated by using the following formula:
 
P = M / (1+r)n = 1000/(1.061)^4 =  $ 789.11   (Answer)

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Jul 1st, 2015

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