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9) The zero coupon bonds of JK Industries have a market price of $211.16, a face value of $1,000, and a yield to maturity of 7.39 percent. How many years is it until these bonds mature

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akindeleot

Answer:

It is 21.43 years until these bonds mature.

Explanation:

Price = Maturity value * 1 ÷ (1 + r)ⁿ

211.16 = 1000 * 1 ÷ (1+0.0739)ⁿ

211.16 = 1000 * 1 ÷ (1.0739)ⁿ

0.21116 = 1 ÷ (1.0739)ⁿ

(1.0739)ⁿ = 1 ÷ 0.21116

(1.0739)ⁿ = 4.736

n = 21.43

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