When bonds are sold for less than the par amount, this means that the

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When bonds are sold for less than the par amount, this means that the stated rate of interest is less than the yield rate of interest. This situation is known as selling the bonds at a discount. The par amount, also known as the face value or principal amount, is the amount that the issuer agrees to pay back at maturity. It does not change regardless of the price at which the bonds are sold.

When Bonds Are Sold for Less Than the Par Amount