Zero coupon bonds problem, Shana wants to purchase 5-year zero coupon bonds with a face

Zero coupon bonds problem

Shana wants to purchase 5-year zero coupon bonds with a face value of $1,000. Her opportunity cost is 8.5 %. Supposing annual compounding, what would be the present market price of such bonds? (Round to the closest dollar.) (a) $1,023 (b) $665 (c) $890 (d) $1,113

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