Respuesta :

The interest rate implicit in a $1,000 par value zero-coupon bond is 10.4%.

What is par value?

The par value is the sum of money which bond issuers guarantee to repay bondholders when the bond matures. A bond is primarily a written promise to repay the amount loan taken to the issuer.

Now, according to the question.

We must calculate the bond's yield to maturity.

A financial calculator can be used to calculate the yield to maturity.

Year 0 cash flow = -500

Cash flow from year 1 to year 6 = 0

Year 7 cash flow = 1000

Thus, Year to Maturity is 10.4%.

Using a financial calculator, calculate the YTM as follows:

  1. Press the CF button to enter the cash flow values. After having entered a value, press enter & the arrow will point downward.
  2. After entering all of the cash flows, click the IRR button, followed by the compute button.

Therefore, the year of maturity is found to be 10.4%.

To know more about the par value, here

https://brainly.com/question/25765493

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