Zero coupon bonds rate of return calculation
However, it is pertinent to note here that there are certain categories of Zero Coupon Bonds which can overcome the taxation problem. Recommended Articles. This has been a guide to what is Zero Coupon Bond. Here we discuss how to calculate Zero Coupon Bond using its pricing formula along with its advantages and disadvantages and practical examples. Instead, the bond holder is rewarded with an increase in the value of the bond over time. You can calculate the present value of a zero coupon bond using a formula involving the stated yield (return), the par or face value, and the time until maturity (when the bond's par or face value will be paid out to the bond holder). About Zero Coupon Bond Calculator . The Zero Coupon Bond Calculator is used to calculate the zero-coupon bond value. Zero Coupon Bond Definition. A zero-coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments.