Question

You find a zero coupon bond with a par value of $20,000 and 17 years to maturity.

  

If the yield to maturity on this bond is 4.9 percent, what is the price of the bond? Assume semiannual compounding periods. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Bond price

$

Answer 1

Function Arguments ? X PV 1 1 = 0.0245 = 34 Rate 4.9%/2 Nper 17*2 Pmt 0 Fv 20000 Type o 1 = 20000 = -8782.603219 Returns the present value of an investment: the total amount that a series of future payments is worth now. Type is a logical value: payment at the beginning of the period = 1; payment at the end of the period = 0 or omitted. Formula result = -$8,782.60 Help on this function D OK Cancel Cancel

Hence, Bond price is $8,782.60

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