> For the complete documentation index, see [llms.txt](https://dev.spectra.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://dev.spectra.finance/integration-reference/spectra-oracles/deterministic-oracles/zero-coupon-bond-model.md).

# Zero Coupon Bond Model

The zero coupon bond model is a pricing model for a Principal Token quoted in underlying. It assumes that the price of the PT is a unit of underlying discounted by an implied rate that stays constant during the term. More specifically, is assumes

$$
P(t,T) =\text{PT.previewRedeem(1)}\exp(-(T-t)r)
$$

where the $$\text{previewRedeem}$$ of the PT gives its redemption value , $$T$$ is the maturity timestamp and $$t$$ is the current timestamp.