Forward Price of a Fixed Income Bond

Tom is assessing a fixed income forward contract to purchase a bond with a face value of $1,000, a coupon rate of 5%, and a maturity of 10 years. The bond pays interest annually. Tom is considering entering into a forward contract that will start in two years, with a delivery date set at that point. The current yield to maturity (YTM) on similar bonds is 4%.

To calculate the forward price of this bond, Tom needs to determine the present value of the bond’s future cash flows, discounted at the current YTM. What is the correct forward price of the bond that Tom should expect at the start of the contract in two years?