单选题 A firm issues a $ 5 million zero coupon bond with a maturity of four years when market rates are 8 percent. Assuming semiannual compounding periods, the total interest on this bond is:

A、

A. $1200000.
B、

B. $1200411.
C、

C. $1346549.

【正确答案】 C

【答案解析】The interest paid on the bond will be the difference between the future value of the bond of $ 5000000 and the proceeds of the bond when it was originally issued. First find the present value of the bond found by N = 8 ; FV = 5000000 ; I = 4 ; PMT = 0 ; CPT PV = -3653451. This is the amount of money the bond generated when it was originally issued. Then take the difference between the $ 5000000 future price and the $ 3653451 from the proceeds = $1346549 which is the interest paid on the bond.