The issue price of each $1,000 bond that pays interest at 5% and has a bond price of 102.10 equals:
A)$1,021.
B)$1,050.
C)$950.
D)$1,000.

Question

Quizplus · Accepted Answer

The bond price is quoted as a percentage of face value.In this case,investors were willing to pay 102.1% of face value,or $1,021 for each $1,000 bond (or $1,000 × 1.021).The stated interest rate does not enter into this calculation.

The Issue Price of Each $1,000 Bond That Pays Interest