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What is the present value of a zero-coupon bond with a par value of R1 000 000,...
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What is the present value of a zero-coupon bond with a par value of R1 000 000, which is due to be redeemed in 10 years’ time, when the market interest rate for such a bond is 6%, interest compounded semi-annually? Set your calculator to four decimal places and round the final answer to the nearest rand. Slight rounding differences may occur depending on whether you use the mathematical formula or a financial calculator. Choose the alternative that is closest to your answer.
(a) R553 676
(b) R744 094
(c) R742 470
(d) R861 667
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