A person buys a newly issued bond that matures in 10 years with a face value of $10,000 and a coupon rate of 5.2%. How much money will the bondholder receive in the tenth year?

Question

Quizplus · Accepted Answer

In the tenth year, the bondholder will receive the final interest payment plus the face value of the bond. The annual interest payment is 5.2% of $10,000, which is $520. Therefore, in the tenth year, the bondholder receives $520 (interest) + $10,000 (face value) = $10,520.

A Person Buys a Newly Issued Bond That Matures in 10