Zero-Coupon Bond Pricing Example If an investor wanted to make 5% imputed interest on a zero-coupon bond with a face value of $15,000 that matures in four years, how much would they be willing to pay?

For example, if a zero-coupon bond with a $20,000 face value and a 20-year term pays 5.5% interest, the interest rate is knocked off the purchase price, and the bond might sell for $7,000.

For example, you might pay $5,000 for a zero-coupon bond with a face value of $10,000 and receive the full price, $10,000, upon maturity in 20 or 30 years. Zero-coupon CDs work the same way.

So, for instance, if you spent $750 on a 10-year $1,000 zero coupon bond, then the fact that the bond was priced to yield around 3% would mean that you'd have to pay tax on 3% of its value each ...

For a zero coupon bond, the convexity is super high anyway, increasing as the square of the maturity. For example, a cousin of this bond is the German bund maturing on August 15, 2029 which has a ...

When the bond matures, you get your $10,000 principal back. With a zero-coupon bond, you collect no interest payments, but the amount you lend is less than the amount you’ll receive at maturity.

How to Use BEY in Comparing Fixed-Income Investments The bond equivalent yield in the example above would be 3.07%. If an investor wanted to buy this discounted bond as-is, 3.07% would be the ...

Zero-coupon bonds live in the investing weeds, easily ignored by ordinary investors seeking growth for college and retirement. Even fixed-income investors may pass them by, because they don't ...

RPT - Ghana zero-coupon bond sparks pricing debate Repeats for wider distribution By Sudip Roy LONDON, Mar 29 (IFR) - Ghana has begun marketing a four-tranche US dollar bond with a big premium ...

PIMCO 25 Year Zero Coupon U.S. Treasury Index ETF (ZROZ) surged 19.4% in a month, outperforming the SPDR S&P 500 ETF Trust's 9.9% gain. ZROZ's rally is attributed to its investment in long ...

At the start of the year, just three companies remained in the ICE BofA U.S. High Yield Deferred Interest Bonds index, which tracks so-called zero-coupon corporate bonds from low-rated companies.