Explore BrainMass

Explore BrainMass

    What would you pay for a zero coupon bond discounted at 7% over remaining 9 years

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    What price would an investor pay for a $10,000 zero coupon corporate bond if it were disounted at 7% over its remaining life of nine years?

    © BrainMass Inc. brainmass.com June 3, 2020, 5:11 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/pay-zero-coupon-bond-discounted-16863

    Solution Preview

    Interest Rate 7% per annum
    Remaining Life 9 years
    Future Value of bond $10,000
    No Coupon payments

    Using FC200 Casio ...

    Solution Summary

    The response shows the calculation using a financial calculator, and secondly, using a formula. The zero coupon bond discounted is found over the remaining life of nine years is found.

    $2.19

    ADVERTISEMENT