A zero coupon bond is a bond that is sold now at a discount and will pay its face value when it matures.  No interest payments are made. Use this information to answer You buy a zero coupon bond with a face value of $15,000 that matures in 28 years for $6,000.  What is your annual compound rate of return?                      %.  Round to the nearest thousandths of a percent (3 decimal places). You have $10,000 to invest, and you do not need to collect on your investment for 10 years. Option 1: You can buy a zero coupon bond with a face value of $13,000 that matures in 10 years. Option 2: You can deposit the money into a CD account that matures in 10 years with an annual percentage yield (APR) of 5.426%. Which option should you choose?  Enter 1 o

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.4: Series And Their Notations
Problem 56SE: To get the best loan rates available, the Riches want to save enough money to place 20% down on a...
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A zero coupon bond is a bond that is sold now at a discount and will pay its face value when it matures.  No interest payments are made.

Use this information to answer

You buy a zero coupon bond with a face value of $15,000 that matures in 28 years for $6,000.  What is your annual compound rate of return?

                     %.  Round to the nearest thousandths of a percent (3 decimal places).

You have $10,000 to invest, and you do not need to collect on your investment for 10 years.

  • Option 1: You can buy a zero coupon bond with a face value of $13,000 that matures in 10 years.
  • Option 2: You can deposit the money into a CD account that matures in 10 years with an annual percentage yield (APR) of 5.426%.

Which option should you choose?  Enter 1 or 2.

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