Pure Discount Bonds

TERM Bond Price Face Value

1 $974.09 $1,000

2 $955.54 $1,000

3 $933.78 $1,000

4 $909.49 $1,000

Based on the information in the table, what is the 1-year interest rate?

2.40%

2.30%

2.66%

2.31%