Purchase Solution

Zero-Coupon Discount Rate

Not what you're looking for?

Ask Custom Question

I would like to have the solution to the following sample problems in EXCEL format, so that I can see the formulas used. Thanks.

1. What is the current value of a zero-coupon bond that pays a face value of $1,000 at maturity in 9 years if the appropriate discount rate is 7%.

Please round your answer to the nearest cent.

2. What interest rate is implicit in a $1,000 par value zero-coupon bond that matures in 5 years if the current price is $430.

Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

3. What is the current value of a $1,000 bond with a 8% annual coupon rate (paid annually) that matures in 9 years if the appropriate discount rate is 5%.

Please round your answer to the nearest cent.

4. What is the current value of a $1,000 bond with a 5% annual coupon rate (paid semi-annually) that matures in 6 years if the appropriate stated annual discount rate is 8%.

Please round your answer to the nearest cent.

Purchase this Solution

Solution Summary

A few problems related to zero coupon, discount rate, interest, current value, face value calculations are solved here in an Excel file.

Solution provided by:
Education
  • BEng, Allahabad University, India
  • MSc , Pune University, India
  • PhD (IP), Pune University, India
Recent Feedback
  • " In question 2, you incorrectly add in the $3.00 dividend that was just paid to determine the value of the stock price using the dividend discount model. In question 4 response, it should have also been recognized that dividend discount models are not useful if any of the parameters used in the model are inaccurate. "
  • "feedback: fail to recognize the operating cash flow will not begin until the end of year 3."
  • "Answer was correct"
  • "Great thanks"
  • "Perfect solution..thank you"
Purchase this Solution


Free BrainMass Quizzes
Multiplying Complex Numbers

This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.

Know Your Linear Equations

Each question is a choice-summary multiple choice question that will present you with a linear equation and then make 4 statements about that equation. You must determine which of the 4 statements are true (if any) in regards to the equation.

Solving quadratic inequalities

This quiz test you on how well you are familiar with solving quadratic inequalities.

Geometry - Real Life Application Problems

Understanding of how geometry applies to in real-world contexts

Graphs and Functions

This quiz helps you easily identify a function and test your understanding of ranges, domains , function inverses and transformations.