Consider a two-year coupon bond that has a present value of $10,000.If the rate of discount is 3 percent, and the payment made at the end of each year is $300, the principal amount to be repaid at the end of two years is
A)$10,000.00.
B)$10,300.00.
C)$33,333.33.
D)$333,333.33.

Question

Quizplus · Accepted Answer

The principal amount to be repaid at the end of two years remains $10,000, as the $300 payments are interest payments and do not change the principal amount.

Consider a Two-Year Coupon Bond That Has a Present Value