Problem
Contributed by Meenakshi Sundaram, Tennessee Tech University
A zero-coupon bond (coupon rate = 0%) with a face value of $10,000 and maturity date in 5 years is being considered for purchase by Pam. The current market interest rate is a nominal 10%, compounded quarterly. How much should she pay for the bond?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.