Answer: $416.67
Explanation: Assuming that the bond pays interest annually, and the maturity value of the bond is $1000, the price of the bond can be computed using the simple interest formula:
FV/(1 + r*t)
Where:
FV = Future value: $1000
R = Rate: 7%
T = Time: 20
Plugging these values we get:
$1000/(1+7%*20) = $416.67
