You are offered $ 1 0 , 0 0 0 in 5 years At an EFFECTIVE rate of 4 6 m o ( this would be nominal 8 y r ) , what is this deal worth today ( These happen to be identical terms for a zero coupon bond with a 5 y maturity )

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You are offered $ 1 0 , 0 0 0 in 5 years. At an EFFECTIVE rate of 4 % 6 m o ( this

You are offered $

10, 000

5

years. At an EFFECTIVE rate of

4 \frac{%}{6} m o (

this would be nominal

8 \frac{%}{y} r),

what is this deal worth today?

(

These happen to be identical terms for a zero

-

coupon bond with a

5 y

maturity.

)

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