A person buys a newly issued bond that matures in 10 years with a face value of $10,000 and a coupon rate of 4%.How much money will the bondholder receive in the tenth year?

Question

Quizplus · Accepted Answer

The coupon rate is 4%, which means the bondholder will receive 4% of the face value every year. 
4% of $10,000 = $400
Therefore, the bondholder will receive $400 every year for 10 years. 
At the end of the 10th year, the bond will mature and the bondholder will receive the face value of $10,000. 
So the total amount of money the bondholder will receive in the 10th year is $10,400.

A Person Buys a Newly Issued Bond That Matures in 10