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Today’s value of a Zero Coupon Bond Par = $1000 Time to Maturity = 20 years...

Today’s value of a Zero Coupon Bond

Par = $1000

Time to Maturity = 20 years

Interest Rate = 3%, 5%, & 7%

What will be the value at 7%?

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Answer #1

Value of the Zero Coupon Bond at 7% = $508.35

Value of the Bond can be calculated using the PV function in excel

Its arguments are Interest rate, Year to Maturity, Coupon Amount and Face Value

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