The state of Ohio needs to raise $25,000,000 for highway repairs. Officials are considering issuing zero coupon

Question:

The state of Ohio needs to raise $25,000,000 for highway repairs. Officials are considering issuing zero coupon bonds, which do not require periodic interest payments. The current market interest rate for the bonds is 8 percent. What face value of bonds must be issued to raise the needed funds, assuming the bonds will be due in 30 years and compounded annually? How would yours answer change if the bond were due in 50 years? How would both answers change if the market interest rate were 6 percent instead of 8 percents?

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...