A bond is sold at a face value of $200 with an annual yield of 3%. How much will the bondholder have received in payment from the bond issuer after the bond has reached its maturity date of one year?(1 point)

Question

Responses

$406
$406

$6
$6

$206
$206

$200

Answer 1

To calculate the total amount the bondholder will receive after one year, we need to consider both the face value of the bond and the interest earned due to the yield.

1. Face Value of the Bond: $200

2. Annual Yield: 3% of $200, which is calculated as follows: \[ \text{Interest} = 0.03 \times 200 = 6 \text{ dollars} \]

3. Total Amount Received at Maturity: \[ \text{Total Amount} = \text{Face Value} + \text{Interest} = 200 + 6 = 206 \text{ dollars} \]

Therefore, the bondholder will receive $206 after the bond has reached its maturity date of one year.

The correct answer is: $206.