Zero-Coupon Bond Pricing Example If an investor wanted to make 5% imputed interest on a zero-coupon bond with a face value of $15,000 that matures in four years, how much would they be willing to pay?

For example, if a zero-coupon bond with a $20,000 face value and a 20-year term pays 5.5% interest, the interest rate is knocked off the purchase price, and the bond might sell for $7,000.