Problem:
The MerryWeather Firm wants to raise $11 million to expand its business. To accomplish this, the firm plans to sell 15-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 4 percent.
Task:
Question: What is the minimum number of bonds the firm must sell to raise the $11 million it needs? Use annual compounding.
- 11,000
- 9,905
- 16,934
- 33,868
- 19,810
Note: Please provide equation and explain comprehensively and give step by step solution.