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painespeach1849
17.09.2019 •
Business
A zero-coupon bond can be redeemed in 20 years for $ 10 comma 000.$10,000. how much should you be willing to pay for it now if you want a return of:
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Ответ:
If a zero-coupon bond can be redeemed in 20 years for $10,000:
a.) If 10% compounded monthly:
10,000 = P {1 + (.10 / 12)}^(12)(20) / P {1 + (.10 / 12)}^(12)(20) / P {1 + (.10 / 12)}^(12)(20)
= 7.328073633249730071995931977855 / 7.328073633249730071995931977855 / 7.328073633249730071995931977855
= 0.13646151090276871636035564271905
= 10,000 * 0.13646151090276871636035564271905
= 1364.6151090276871636035564271905
P = $1364.62
You should be willing to pay $1364.62 for it now if you want a return of 10% compounded monthly.
b.) If 10% compounded continuously:
A = Pe^rt
10,000 = Pe^(10)(20) / e^(10)(20) / e^(10)(20)
$1353.35 = P
You should be willing to pay $1353.35 for it now if you want a return of 10% compounded continuously.
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