Wallpaperorkk

Let's say a zero coupon bond is issued for $500 and will pay $1,000 at maturity in 30 yearsMost bonds pay interest semiannually until maturity, when the bondholder receives the par value, or bond principal, of the bond back Zero coupon bonds pay no interest, but are sold at a discount to par value, so the interest, which is the difference between par value and the discounted issue price, is paid when the bond matures Nonetheless, the yield of the zero coupon bond is the annualized return, which allows it to be compared to coupon bondsSo a 10 year zero coupon bond paying 10% interest with a $1000 face value would cost you $ today In the opposite direction, you can compute the yield to maturity of a zero coupon bond with a regular YTM calculator Other Financial Basics Calculators Zero coupon bonds are yet another interesting security in the fixed income world Answered A 12 75 Year Maturity Zero Coupon Bond Bartleby Yield rates to maturity for zero coupon bonds are currently quoted a...