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A 1-year discount bond (or zero-coupon bond) has a face value of $5,000. The demand and supply curves for this bond are as follows: Bond

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A 1-year discount bond (or zero-coupon bond) has a face value of $5,000. The demand and supply curves for this bond are as follows: Bond price Demand for bond Supply of bond $4,900 200 600 $4,850 300 500 $4,800 400 400 $4,750 500 300 What is the equilibrium interest rate? (use the supply-and-demand framework for bonds to determine the interest rate)

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