How much would a zero coupon bond sell

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1. How much would a zero coupon bond sell for today that pays $1,000 in 10 years, assuming an interest rate of 3% that is compounded monthly? Assume that there are no sales commissions or other transaction costs. Note: Zero coupon bonds are bonds that do not pay interest during the life of the bonds. Instead, investors buy zero coupon bonds at a deep discount from their face value, which is the amount a bond will be worth when it "matures" or comes due. When a zero coupon bond matures, the investor will receive one lump sum equal to the initial investment plus the imputed interest.

2. Find the Future Value 86 months from now of an investment of $11,342 made 6 months from now if the interest rate is 6.21% compounded monthly.

Reference no: EM131308287

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