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Zero Coupon Bond (Definition, Formula, Examples, Calculations) (5 days ago) ZeroCoupon Bond Value = $1000/ (1008)^10 = $ Thus the Present Value of Zero Coupon Bond with a Yield to maturity of 8% and maturing in 10 years is $ https//wwwwallstreetmojocom/zerocouponbond/A zero coupon bond (also discount bond or deep discount bond) is a bond in which the face value is repaid at the time of maturity That definition assumes a positive time value of moneyIt does not make periodic interest payments or have socalled coupons, hence the term zero coupon bond When the bond reaches maturity, its investor receives its par (or face) valueZeroCoupon Bond Formula The formula for calculating the yield to maturity on a zerocoupon bond is Yield To Maturity= (Face Value/Current Bond Price)^ (1/Years To Maturity)−1 Consider a $1,000 1 The Following Table Summarizes Prices Of Various Default Free Zero Coupon Bonds Expressed As A Percentage Of Homeworklib Yield to maturity formula zero coupon bond