Homework Question Need Help With

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Suppose you purchase a zero coupon bond with a face value of $1,000, maturing in 22 years, for $215.00. 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 8th, 2015

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

$12.78 answer

1000 FV, 25 N, -180 PV, CPT I/Y = YTM = 7.1%; Year 1 interest = $180 x .071 = $12.78


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Jul 8th, 2015

correct answer was 17.11

Jul 8th, 2015

yes you are right......sorry.....plz wait

Jul 8th, 2015
https://www.studypool.com/free/221831


Jul 8th, 2015

plz wait...i made a mistake in calculation......thanks

Jul 8th, 2015

my time is running out on the question friend


Jul 8th, 2015

ok....just sending you

Jul 8th, 2015

 $17.11 answer

1000 FV, 22 N, -215 PV, CPT I/Y = YTM = 8.3%; Year 1 interest = $215 x .012 = $17.11


Jul 8th, 2015

 $17.11 answer

1000 FV, 22 N, -215 PV, CPT I/Y = YTM = 8.3%; Year 1 interest = $215 x .012 = $17.11


Jul 8th, 2015

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