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A discount rate applied times over equal subintervals of a year is found from the annual effective rate d as. where is called the annual nominal rate of discount convertible thly. is the force of interest . The rate is always bigger than d because the rate of discount convertible thly is applied in each subinterval to a smaller (already ...
t. e. A zero-coupon bond (also discount bond or deep discount bond) is a bond in which the face value is repaid at the time of maturity. [1] Unlike regular bonds, it does not make periodic interest payments or have so-called coupons, hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value.