bootstrapping spot rates

[frmaaa]

hello everyone,
im going through the bootstrapping problems now.. and i cannot figure out how to get the spot rate if you know that the T-bond matures in 1year, is priced at 104.0469% of par, and has a semiannual coupon of 6.25%. previous spot rate (6-month) equals 1.491%.

104.0469=(6.25/2*e^(-0.01491/2))+(100+6.25/2)*e^(-Z2/2*2)

how do i find Z2..?

please, anyone..?

 

[ShaktiRathore]

hi proceed as follows,
104.0469=(6.25/2)*e^(-0.01491/2)+(100+(6.25/2))*e^(-Z2/2*2)
104.0469-(6.25/2)*e^(-0.01491/2)=(100+(6.25/2))*e^(-Z2)
[104.0469-(3.125)*.992573]/(103.125)=e^(-Z2) divide by 100+(6.25/2) on both sies
.9788=e^(-Z2)
ln(.9788)=-Z2 (take log n both sides)
ln(1/.9788)=Z2
.021406=Z2
.021406=Z2
.or Z2=2.14% approx..

thanks

 

[frmaaa]

thank you, Shakti!