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Business & Finance
Tutor: None Selected Time limit: 1 Day

Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 21 years, for $215.15. Zero coupons pays the investor the face value of the maturity date. What is the implicit interest in the first year of the bonds life?

Jul 7th, 2015

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

213.65 = 1000/(1+r)^21

r = 0.0762642376

po = 213.65
P1 = 1000/(1+0.0762642376)^20 = 229.94

implicit interest in first year =229.94 - 213.65 = 16.29


Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 7th, 2015
correct answer was 16.33. Want to take a crack at similar question?
Jul 7th, 2015

ohh  but my method is correct friend 

Jul 7th, 2015

I just entered your answer and it stated 16.33 is correct answer

Jul 7th, 2015

Ohh I am really sorry friend 

Jul 7th, 2015

Where did you get 213.65 from?


Jul 7th, 2015

yeah that was my mistake . I uses 213.65 instead of 215.15

Jul 7th, 2015

do you have any other assignment ?

Jul 7th, 2015

Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 19 years, for $213.95. Zero coupons pays the investor the face value of the maturity date. What is the implicit interest in the first year of the bonds life?


Jul 7th, 2015

can you send all together ?


Jul 7th, 2015

I only get one at a time

Jul 7th, 2015

can you pay me some advance money ?

Jul 7th, 2015

I done paid someone before early and they could not get 1 answer correct and my money was lost. I use the free question just to see who can actually come up with the right answers and no one has done so yet. Give me one right answer then we can go from there about money?

Jul 7th, 2015

You there?


Jul 7th, 2015

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Jul 7th, 2015
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Jul 7th, 2015
Dec 5th, 2016
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