Decoding Zero Coupon Bonds: A Comprehensive Guide for Financial Wizards
Calculating the value of a zero-coupon bond on a financial calculator is a fundamental task in the investing realm. These types of bonds, often called “discount bonds,” are unique in that they pay no interest over their lifespan, but rather are sold at a significant discount to their face value. Upon maturity, investors receive a single, lump-sum payment representing the face value.