What is the effective annual interest rate
Question:
A zero-coupon bond pays no interest and simply pays principal amount at maturity. A 20-year, $1,000 principal amount, zero-coupon bond is currently priced at $258.40. What is the effective annual interest rate?
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A 20-year, $1,000 principal amount, zero-coupon bond is currently priced at $258.40. What is the effective annual interest rate?
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