Example 1 – Applying a Generic Formula to Create a Zero Coupon Bond Price Calculator in Excel Thegeneric formulaforZero Coupon Price Calculation=(Face Value)/〖(1+r)〗^t Steps: Use the following formula in cellC8. =C5/(1+C6)^C7 ...
Since the Interest accrued is discounted from the Par value of such Bonds at purchase, which effectively enables Investors of Zero Coupon Bonds to buy a greater number of such bonds compared to any other Coupon Bearing Bond. Formula Let us understand the formula to use azero coupon bond calcul...