The total interest paid on a zero-coupon bond is equal to:

Name: The total interest paid on a zero-coupon bond is equal to:
Brand: Quizplus
Rating: 4.9 (51 reviews)

Question

Quizplus · Accepted Answer

The total interest paid on a zero-coupon bond is indeed the face value minus the issue price. This is because a zero-coupon bond is sold at a discount to its face value and does not pay periodic interest. The difference between the purchase price (issue price) and the face value (which is paid at maturity) represents the interest earned by the holder.

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