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Zero Coupon Bond Effective Yield Formula

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Zero Coupon Bond Effective Yield is used to calculate the periodic return for a zero coupon bond, or sometimes referred to as a discount bond. Check FAQs

ZCB Yield = {(\frac{FV}{PV})}^{\frac{1}{n}} - 1

ZCB Yield - Zero Coupon Bond Effective Yield?FV - Face Value?PV - Present Value?n - Number of Periods?

Zero Coupon Bond Effective Yield Example

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Here is how the Zero Coupon Bond Effective Yield equation looks like with Values.

Here is how the Zero Coupon Bond Effective Yield equation looks like with Units.

Here is how the Zero Coupon Bond Effective Yield equation looks like.

8.4281 = {(\frac{800}{9})}^{\frac{1}{2}} - 1

8.4281 = {(\frac{800}{9})}^{\frac{1}{2}} - 1

8.4281 = {(\frac{800}{9})}^{\frac{1}{2}} - 1

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Zero Coupon Bond Effective Yield Solution

Follow our step by step solution on how to calculate Zero Coupon Bond Effective Yield?

FIRST Step Consider the formula

ZCB Yield = {(\frac{FV}{PV})}^{\frac{1}{n}} - 1

Next Step Substitute values of Variables

∴

ZCB Yield = {(\frac{800}{9})}^{\frac{1}{2}} - 1

Next Step Prepare to Evaluate

∴

ZCB Yield = {(\frac{800}{9})}^{\frac{1}{2}} - 1

Next Step Evaluate

∴

ZCB Yield = 8.42809041582063

LAST Step Rounding Answer

∴

ZCB Yield = 8.4281

Zero Coupon Bond Effective Yield Formula Elements

Variables

Zero Coupon Bond Effective Yield

Zero Coupon Bond Effective Yield is used to calculate the periodic return for a zero coupon bond, or sometimes referred to as a discount bond.

Symbol: ZCB Yield

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Zero Coupon Bond Effective Yield

Face Value

Face Value is the nominal value or dollar value of a security stated by the issuer.

Symbol: FV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Face Value

Present Value

The Present Value of the annuity is the value that determines the value of a series of future periodic payments at a given time.

Symbol: PV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Value

Number of Periods

The Number of Periods is the periods on an annuity using the present value, periodic payment, and periodic rate.

Symbol: n

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Number of Periods

Other formulas in Bond Yield category

Go Yield to Maturity

YTM = \frac{CP + (\frac{FV - Price}{Yrs})}{\frac{FV + Price}{2}}

Go Current Bond Yield

CBY = \frac{CP}{CBP}

Go Coupon Bond Valuation

CB = C A \cdot (\frac{1 - {(1 + YTM)}^{- n PYr}}{YTM}) + (\frac{P vm}{{(1 + YTM)}^{n PYr}})

Go Bank Discount Yield

BDY = (\frac{D}{FV}) \cdot (\frac{360}{DTM}) \cdot 100

How to Evaluate Zero Coupon Bond Effective Yield?

Zero Coupon Bond Effective Yield evaluator uses Zero Coupon Bond Effective Yield = (Face Value/Present Value)^(1/Number of Periods)-1 to evaluate the Zero Coupon Bond Effective Yield, Zero Coupon Bond Effective Yield is used to calculate the periodic return for a zero-coupon bond, or sometimes referred to as a discount bond. Zero Coupon Bond Effective Yield is denoted by ZCB Yield symbol.

How to evaluate Zero Coupon Bond Effective Yield using this online evaluator? To use this online evaluator for Zero Coupon Bond Effective Yield, enter Face Value (FV), Present Value (PV) & Number of Periods (n) and hit the calculate button.

FAQs on Zero Coupon Bond Effective Yield

What is the formula to find Zero Coupon Bond Effective Yield?

The formula of Zero Coupon Bond Effective Yield is expressed as Zero Coupon Bond Effective Yield = (Face Value/Present Value)^(1/Number of Periods)-1. Here is an example- 8.42809 = (800/9)^(1/2)-1.

How to calculate Zero Coupon Bond Effective Yield?

With Face Value (FV), Present Value (PV) & Number of Periods (n) we can find Zero Coupon Bond Effective Yield using the formula - Zero Coupon Bond Effective Yield = (Face Value/Present Value)^(1/Number of Periods)-1.

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Zero Coupon Bond Effective Yield Formula

Zero Coupon Bond Effective Yield Example

Zero Coupon Bond Effective Yield Solution

Zero Coupon Bond Effective Yield Formula Elements

Other formulas in Bond Yield category

How to Evaluate Zero Coupon Bond Effective Yield?

FAQs on Zero Coupon Bond Effective Yield

Variable Name