If you bought a 20-year bond issued by the government,with a par value of $1,000 and an interest rate of 8%.At maturity you will be returned the principal of
A)$80.
B)$500.
C)$800.
D)$1,000.
E)$1,600.

Question

Quizplus · Accepted Answer

A 20-year bond issued by the government with a par value of $1,000 and an interest rate of 8% means that the bond will pay $80 in interest per year (8% of $1,000). At maturity, the bondholder will be returned the principal of $1,000. Therefore, the correct answer is D.

If You Bought a 20-Year Bond Issued by the Government,with