Zéta SA acquires a zero-coupon security repayable in two years for 1,102,500, with no other cash flow. The annual effective interest rate, given by the case, is 5 %, and the security is measured at amortised cost. Calculate the initial amount of the security (present value of the cash flows at the effective rate), then the interest income for the first year.
- Amount repayable in two years
- 1,102,500
- Annual effective interest rate (case datum)
- 5 %