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 $215.30. 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!

 $17.11 answer

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


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Jul 8th, 2015

Question state $215.30 not $215. Did you read question?

Jul 8th, 2015

Sorry. ...sir I calculate in a hurry....thats why missed that.....only just put 0.30.....calculation is correct

Jul 8th, 2015

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Jul 8th, 2015
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