A zero-coupon ₹1,000 par value bond is currently selling for ₹540. It matures in exactly eight years. What is the discount rate on this bond? What should the price be to yield 10 per cent?

What would the price be after three years? What rate of return do you obtain if you hold the bond for this period of three years?

If after three years the discount rate reduces to 6 per cent, what will be the price of the bond? What rate of return do you get if you hold the bond for this period of three years?