A zero coupon bond is sold at a discount and pays no cash interest during its lifetime.

Question:

A zero coupon bond is sold at a discount and pays no cash interest during its lifetime. At maturity is pays the face value of the bond. What is the current value of a 8 year zero coupon bond if the current market interest rate is 4.85%

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...