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Calculate the price of a zero coupon bond that matures in 12 years if the market...

Calculate the price of a zero coupon bond that matures in 12 years if the market interest rate is 6.05 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Zero coupon bond price $

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Answer #1


Bond Value = $494.16

Using financial calculator BA II Plus - Input details:

#

I/Y = Rate or yield / frequency of coupon in a year =

              6.050000

PMT = Coupon rate x FV / frequency =

$0.00

N = Number of years remaining x frequency =

12.00

FV = Future Value =

-$1,000.00

CPT > PV = Present value of bond =

$494.16

Or

Bond Value = 1000/(1+6.05%)^12 = $494.16

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