Zack is preparing a college fund for his new born son. Today, Zack plans to buy ZERO
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Question:
Zack is preparing a college fund for his new born son. Today, Zack plans to buy ZERO coupon bonds that will mature when his son begins college in 18 years to cover tuition of $40000 for one year.
A. How many bonds does Zack need to purchase?
B. What is the price of each zero coupon bond if they are priced to yield 5.8% and maturity value of $1000?
C. What is the total amount invested?
Related Book For
Intermediate Accounting
ISBN: 978-0470616314
IFRS edition volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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