Suppose you purchase a $800 Face-Value Zero-Coupon Bond with maturity 28 years and yield to maturity 4% quoted with annu

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Suppose you purchase a $800 Face-Value Zero-Coupon Bond with maturity 28 years and yield to maturity 4% quoted with annu

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Suppose you purchase a $800 Face-Value Zero-Coupon Bondwith maturity 28 years and yield to maturity 4% quoted withannual compounding. Show the bond cash flows on a time line andcompute the current price of the bond. Draw a graph to illustratehow the price of this bond will change as it gets closer tomaturity – Price (on y axis) vs Time (on x axis).Please show what formula you woulduse.
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