Zero-Coupon Bond Value Calculator







Formula

The formula to calculate the value of a zero-coupon bond is:

\[ ZCBV = \frac{F}{(1+r)^t} \]

Where:

Zero Coupon Bond Definition

A zero-coupon bond is a security that does not pay interest but trades at a discount and renders a profit at maturity when the bond is redeemed for its face value.

Example Calculation

Let's assume the following values:

Step 1: Calculate the denominator:

\[ (1 + 0.05)^{10} = 1.62889 \]

Step 2: Divide the face value by the denominator:

\[ \frac{1000}{1.62889} = 613.91 \]

Therefore, the zero-coupon bond value is $613.91.