Solve the problem.
-Find the face value (to the nearest thousand dollars) of the 30 -year zero-coupon bond at $3.7 \%$ (compounded semiannually) with a price of $\$ 19,975$.
A) $\$ 60,000$
B) $\$ 40,800$
C) $\$ 60,500$
D) $\$ 40,000$

Question

Quizplus · Accepted Answer

The formula for the future value of a zero-coupon bond is $ FV = P(1 + r/n)^{nt} $. Here, $ P = 19975 $, $ r = 0.037 $, $ n = 2 $, and $ t = 30 $. Solving gives $ FV \approx 60000 $.

Solve the Problem 3.7%3.7 \%3.7% (Compounded Semiannually) with a Price Of $19,975\$ 19,975$19,975

Solve the Problem $3.7 \%$ (Compounded Semiannually) with a Price Of $\$ 19,975$