What is the current value of this bond

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Reference no: EM131829172

1. Suppose on January 1 you deposit $500 in an account that pays a nominal, or quoted, interest rate of 15%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later? Note: the cash flow is a lump sum - not an annuity

2. Diane Carter is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9.14 percent. Assume annual coupon payments. what is the current value of this bond? (Round answer to 2 decimal places, e.g. 15.25.)

Reference no: EM131829172

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