Question

Determine the face value of a zero coupon bond whose maturity is 3 years, its IRR is 4% and has a present value of $8,420

285

likes

1426 views

Answer to a math question Determine the face value of a zero coupon bond whose maturity is 3 years, its IRR is 4% and has a present value of $8,420

$Expert avatar$

Jon

4.6

99 Answers

1. The formula for the present value (PV) of a zero-coupon bond is given by:

PV = \frac{FV}{(1 + r)^n}

where:
- $PV$ is the present value
- $FV$ is the face value
- $r$ is the interest rate (IRR)
- $n$ is the number of years to maturity

2. Rearrange the formula to solve for the face value $FV$:

FV = PV \times (1 + r)^n

3. Substitute the given values into the formula:

FV = 8,420 \times (1 + 0.04)^3

4. Perform the calculation:

FV = 8,420 \times (1.04)^3

FV = 8,420 \times 1.124864

FV \approx 9478.40

Answer:

FV \approx 9478.40

Frequently asked questions (FAQs)

Question: Solve the function f(x) = 2x^3 - 5x^2 + 4x - 3 for x = 2

Q: What is the period of a sine function with a coefficient of 3 in front of the angle measurement?

Question: State the rule for congruence of triangles with corresponding parts.

New questions in Mathematics

1 + 1

3(2+x)-2(2x+6)=20-4x

Determine the correct value: A company knows that invoices pending collection have a normal distribution with a mean of $1.65 million, with a standard deviation of $0.2 million, then: The probability that an invoice pending collection has an amount that is within more than 2 deviations below the mean, is:

To make brine, José buys 1 kg of salt and pays 12 pesos. If he buys 4 kg, they charge him 48 pesos, but for 100 pesos they sell him 9 kg. What is the constant of proportionality?

We have spent 1/4 of the inheritance on taxes and 3/5 of the rest on buying a house. If the inheritance was a total of €150,000 How much money do we have left?

Log5 625

The Humane Society has asked for our help again this week. Currently they are charging $50 for an adoption fee. Unfortunately they just pulled this number out of the air and do not know why they are charging this amount. They would like to charge an amount that covers all the adoption costs – both the variable costs for adoptions as well as the fixed cost for the kennel portion of the Humane Shelter operations. We can help them by doing a breakeven analysis. During a client meeting we gathered these facts. There are 2 part-time employees that each earn $1000 per month. The utilities for the kennel area (water, electricity) are $200 per month. The average food cost for animals in the kennel is $800 per month. In addition, each animal that is adopted receives a rabies vaccination that costs $4 and is micro-chipped that costs $6. At the current cost of $50, how many animals must be adopted to break-even? What would break-even be at a $60 adoption fee? What would break-even be if the fee were lowered to $40? The newspaper has suggested that the Humane Society advertise to increase pet adoptions. The package that they have recommended costs $1000 for a very small ad run every day for a month. If the Humane Society does this extra advertising, how will it affect breakeven? Based on what you have learned about elasticity, what price do you recommend for the adoption fee?

The following table shows the frequency of care for some animal species in a center specializing in veterinary dentistry. Species % Dog 52.8 Cat 19.2 Chinchilla 14.4 Marmoset 6.2 Consider that the center only serves 10 animals per week. For a given week, what is the probability that at least two are not dogs? ATTENTION: Provide the answer to exactly FOUR decimal places

The maximum gauge pressure of a hydraulic ramp is 16 atm, with a support area whose diameter is 20 cm. What is the mass of the heaviest vehicle that can be lifted?

How much does the average college student spend on food per month? A random sample of 50 college students showed a sample mean $670 with a standard deviation $80. Obtain the 95% confidence interval for the amount college students spend on food per month.

DuocUC 2) The cost C, in pesos, for the production of x meters of a certain fabric can be calculated through the function: (x+185) C(x)=81300-6x+ 20000 a) It is known that C(90) 5.344. Interpret this result. (2 points) b) Calculate C'(x) (2 points) 3 x²+111x-0.87 20000 2000 c) Function C calculates the cost while producing a maximum of 500 meters of fabric. Determine the values of x at which the cost of production is increasing and the values of x at which the cost is decreasing. (3 points) d) If a maximum of 500 meters of fabric are produced, what is the minimum production cost? (

A machine produces 255 bolts in 24 minutes. At the same rate, how many bolts would be produced in 40 minutes?

A bag has 4 green lollipops, 3 white lollipops, and 1 black lollipop. What is the probability of drawing a white lollipop?

We have received our p&l statement back from accounts. The board has asked for an innovation hub. What items should we prioritise reviewing to decide if we can afford an innovation hub?

Write an expression using compatible numbers that can be used to estimate the quotient 629\86

Perform operations with the polynomials P(x) = x3 and Q(x) = 2x2 + x – 3x3 : a) P(x) - Q(x)

Given a circle 𝑘(𝑆; 𝑟 = 4 𝑐𝑚) and a line |𝐴𝐵| = 2 𝑐𝑚. Determine and construct the set of all centers of circles that touch circle 𝑘 and have radius 𝑟 = |𝐴𝐵|

calculate the product of 4 and 1/8

Find the orthogonal projection of a point A = (1, 2, -1) onto a line passing through the points Pi = (0, 1, 1) and P2 = (1, 2, 3).

Find the rule that connects the first number to the second number of each pair. Apply the rule to find the missing number in the third pair. (18 is to 22) (54 is to 26) (9 is to ?)

Determine the face value of a zero coupon bond whose maturity is 3 years, its IRR is 4% and has a present value of $8,420

Answer to a math question Determine the face value of a zero coupon bond whose maturity is 3 years, its IRR is 4% and has a present value of $8,420

You might be interested in