Question

A zero-coupon bond is a bond that is sold now at a discount and will pay its face value at the time when it matures; no interest payments are made. A zero-coupon bond can be redeemed in 20 years for $10,000. How much should you be willing to pay for it now if you want a return of: (a) 11% compounded daily? (b) 11% compounded continuously?

          A zero-coupon bond is a bond that is sold now at a discount and
will pay its face value at the time when it matures; no interest
payments are made. A zero-coupon bond can be redeemed in 20 years
for $10,000. How much should you be willing to pay for it now if
you want a return of:
(a) 11% compounded daily?
(b) 11% compounded continuously?
        
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Added by Christopher M.

Calculus: Early Transcendentals
Calculus: Early Transcendentals
James Stewart 8th Edition
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A zero-coupon bond is a bond that is sold now at a discount and will pay its face value at the time when it matures; no interest payments are made. A zero-coupon bond can be redeemed in 20 years for $10,000. How much should you be willing to pay for it now if you want a return of: (a) 11% compounded daily? (b) 11% compounded continuously?
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Transcript

-
00:01 In this question we need to stay polar form for each coordinate equation here.
00:11 So let's simplify our question for function of t.
00:15 Here it is given that r is green within zero.
00:18 So for our first equation which is y is equal to 10, our polar form for this equation will be as we will consider our equation.
00:29 So now what we will do here? as we have y is equal to 10, we will start our solution by taking our value for polar coordinates as x will be equal to r cos, cost, cost, t.
00:47 And we will take y as equal to r sine t.
00:52 So these are the assumption.
00:54 And now our value for x squared plus y square will be as r squared cos square t, add a by r squared sine square t so we can take r square common from here and this will be as cos square t added by sine square t that is equal to one as for the trigonometric identity so we will have x square plus y square which is equal to r square and then our value in the simplification of y is equal to 10 that will be by sine t is equal to 10 and i'm sorry this is r sine t sorry for this mistake r sine t and here r will be equal to 10 divided by sine t and this implies as r is equal to 10 cosy so here is the solution of first part of the question this is the answer for a part answer of a part now let's move on to the second part of the question.
02:10 So for part b, where we have our equation x square plus y square is equal to 10.
02:15 So again we have r square which is equal to 10 and therefore value for r will be square root 10.
02:23 So this is our solution for b part of the question.
02:27 Once we have taken our value we can put directly to solve all of the parts.
02:33 Now for the next part part c we have x squared plus y square minus 6x is equal to 0...
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