Compute the Interest Rate for a $1,000 Face Value a Bond

question 101

Essay

Compute the interest rate for a $1,000 face value a bond that sells for $280 and matures in
20 years. The bond has no coupon payments, only the face value payment.

---

Definitions:

Conditioned Response

A learned reaction to a previously neutral stimulus that has become associated with an unconditioned stimulus.

Potato Salad

A dish typically made from boiled potatoes and a variety of other ingredients, including mayonnaise, herbs, vegetables, and sometimes meat.

Stomach

An organ in the digestive system that secretes acid and enzymes to digest food before it moves into the small intestine.

Conditioned Stimulus

A formerly neutral signal that, once linked with an unconditioned stimulus, ultimately leads to eliciting a conditioned response.