Question $14$

What is the price of a zero coupon bond maturing in $4$ years where the update of the interest occurs every half a year. Assume principal is $100.$ Annual interest per annum is $4\%$

$1.$

$85\mathrm{.}35$

$2.$

$84\mathrm{.}86$

$3.$

$86\mathrm{.}17$

$4.$

$85\mathrm{.}13$