Fiona Corcoran is responsible for meeting distributions for EEM Health and Life Insurance Company. An actuary, Robert Bjornsund, has forecasted that a specific policy will require $$210,000$ after $10$ years. Current interest rates are $8$ percent, and RPM Restoration equipment trust certificates $($i$.$e$.,$ collateralized bonds$)$ are available for possible investment. Their terms are

Bond A: zero percent coupon with maturity in $10$ years, Bond $B$:$8$ percent coupon with maturity in $10$ years, Bond $C$:$8$ percent coupon with maturity in $18$ years.

Bjornsund, who has not been trained in investments, is dubious that the three alternatives will meet the required cash in a timely fashion and asks several questions.

What does an equipment trust certificate imply?

What is the cost of each bond if it is priced to yield $8$ percent?

How much will have to be invested in the zero coupon bond to meet the objective?