The total interest paid on a zero-coupon bond is equal to:
A)zero.
B)the face value minus the issue price.
C)the face value minus the market price on the maturity date.
D)$1,000 minus the face value.
E)$1,000 minus the par value.

Question

Quizplus · Accepted Answer

A zero-coupon bond does not pay periodic interest. Instead, it is issued at a discount to its face value, and the total interest paid is the difference between the face value and the issue price.

The Total Interest Paid on a Zero-Coupon Bond Is Equal