You buy a $1,000 par value zero coupon bond that matures in 8 years. What is the

Question

You buy a $1,000 par value zero coupon bond that matures in 8 years. What is the current price of the bond if it is priced to yield 9%? Answer $1,000 $829 $280 $447 $914 $502 $1,469 You buy a $1,000 par value zero coupon bond that matures in 8 years. What is the current price of the bond if it is priced to yield 9%? You buy a $1,000 par value zero coupon bond that matures in 8 years. What is the current price of the bond if it is priced to yield 9%? $1,000 $829 $280 $447 $914 $502 $1,469 $1,000 $829 $280 $447 $914 $502 $1,469

Explanation / Answer

Hi,

Please find the answer as follows:

N = 8

R = 9%

PMT = 0

FV = 1000

Price = PV(9%, 8,0,1000) = 501.87 or 502

Answer is 502

Thanks.

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