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A $1,000 par value, 20 years Government zero coupon bond promises to pay back the principle or par value on maturity date, July 15, 2025. Today, the discount rate on future payments (yield to maturity) is 4.3%. The price of the bond today will be:

Price of bond = Par value x 1(1+𝑟𝑟)𝑛𝑛

Price of bond = 1000 x 1(1+(0.043/2))20𝑥𝑥2 = $427.04

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