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    Zero-Coupon Bond

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    A zero-coupon bond pays no interest and simply pays principal amount at maturity. A 20-year, $1,000 principal amount, zero-coupon bond is currently priced at $258.40. What is the effective annual interest rate?

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    https://brainmass.com/business/bond-valuation/zero-coupon-bond-328515

    Solution Preview

    A zero-coupon bond pays no interest and simply pays principal amount at maturity. A 20-year, $1,000 ...

    Solution Summary

    Response provides steps in calculating the value of Zero-coupon Bond

    $2.19

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