Answer:
The present value/ Price of the bond is $230.21
Explanation:
The bond has a future value of 1,000 which means it will pay 1,000 when it matures, also there are no payments in between as this is a pure discount bond. In order to find the present value/price we will have to discount 1000 by the current interest rate and 20 years back.
Present value = Future value/(1+Interest rate)^N
Future value = 1,000
Interest rate = 7.62%
N= 20
1000/(1.0762)^20
PV= 230.21
