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Popular Word Problems >

A zero coupon bond with a face value of 28,000 matures in 20 years. What should the bond be sold for now if its rate of return is to be 2.659% compounded annually? . Round to the nearest dollar.

Solução

A zero co u p o n b o n d w i t h a f a ce v a l u e o f 28, 000 ma t u res in 20 ye a rs . Wha t s h o u l d t h e b o n d b e so l d f or n o w i f i t s r a t e o f re t u r n i s t o b e 2.659% co m p o u n d e d ann u a ll y ? . R o u n d t o t h e n e a res t d o ll a r .

Solução

Principal : 16565.99

Passos da solução

Translate the problem into an equation:

28000 = P (1 + \frac{0.02659}{1})^{1 \cdot 20}

Resolver para

P, 28000 = P (1 + \frac{0.02659}{1})^{1 \cdot 20} : P = 16565.99

Principal : 16565.99

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