Zero Coupon Bond Calculator
Introduction & Importance
Zero-coupon bonds are debt securities that do not pay interest periodically. Instead, they are issued at a deep discount to their face value and redeemed at maturity for the full face value…
How to Use This Calculator
- Enter the face value of the bond.
- Enter the discount rate.
- Enter the number of years to maturity.
- Click ‘Calculate’.
Formula & Methodology
The formula to calculate the present value of a zero-coupon bond is:
PV = FV / (1 + r)^n
Where:
- PV is the present value (what you pay now)
- FV is the face value (what you get back)
- r is the discount rate
- n is the number of years