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You find a zero coupon bond with a par value of $25,000 and 18 years to...

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Finance

You find a zero coupon bond with a par value of $25,000 and 18years to maturity.

If the yield to maturity on this bond is 3.9 percent, what isthe dollar price of the bond? Assume semiannual compoundingperiods.

What is the bond price?

Answer & Explanation Solved by verified expert
4.4 Ratings (549 Votes)
Price of the bond can be calculated by the following formula Bond price Present value of interest payment Present value of bond payment at maturity Since this is    See Answer
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Transcribed Image Text

You find a zero coupon bond with a par value of $25,000 and 18years to maturity.If the yield to maturity on this bond is 3.9 percent, what isthe dollar price of the bond? Assume semiannual compoundingperiods.What is the bond price?

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