Answer:
10.76%
Explanation:
Calculation for the implicit yield of zero-coupon bond
Using this formula
P(1 + i)n = F
Where,
P = 60
F = 100
n = 5 years
Let plug in the formula
First step
60(1+ i)5 = 100
Second Step
(1+ i)5 = 100 / 60
= 1.667
Third step to find the fifth root of 1.667
1 + i = 5th root of 1.667
= 1.1076
Last step is to calculate the implicit yield
i = 1.1076 - 1
i= 0.1076 *109
I= 10.76%
Therefore the implicit yield of zero-coupon bond will be 10.76%
