If Face value = 100000 rate= 12 and 4months?

Need help test in a few days

I think you are referring to a zero COUPON bond.

If the interest accrues monthly...

PV (Price) = Face / (1 + r)^n...since n is measured in months, you must match r to a monthly periodic rate, so r = 0.12 / 12 = 0.01

PV = 100,000 / 1.01^4

= 100,000 / 1.04060

= $96,098.03

This means you pay $96,098.03 today, and receive $100,000 in four months.

You may be asked to calculate based on a bankers discount rate "Rbd", then you would use a day count. Assuming 4 30 day months = 120 days, in a 360 day year (the convention for Rbd). (See the link.)

Discount = Rbd * Face * (#days to maturity / 360)

Discount = 0.12*100,000*120/360 = $4,000

Price = 100,000 - 4,000 = $96,000

You have not mentioned the installment amount nor the installment period Is it monthly ?

If Face value = 100000 rate= 12 and 4months?

Need help test in a few days