Answer:
Zero-cupon bond= $14,213.63
Explanation:
Giving the following information:
A zero-coupon bond has a face value of $21,000 and a maturity of 8 years. Similar bonds have an interest rate of 5% per year.
To calculate the price of the bond, we need to use the following formula:
Zero-cupon bond= [face value/(1+i)^n]
Zero-cupon bond= [21,000 / (1.05^8)]
Zero-cupon bond= $14,213.63
