posted by Destiney .
Suppose a zero-coupon bond is selling for $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. Its annual rate of return would be about
taking log of each side
.2188= 10 log(1+i)
1-i= 10^ .2188=1.05167
Double check all that, it is slightly off