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 dollars

$6
6 dollars

$200
200 dollars

$206

Answer 1

To determine how much the bondholder will receive upon the bond's maturity, we need to consider both the face value of the bond and the interest earned.

1. Face Value of the Bond: $200
2. Annual Yield (Interest): 3% of $200 = 0.03 * 200 = $6

At maturity, the bondholder will receive the face value plus the interest:

\[ \text{Total Payment} = \text{Face Value} + \text{Interest} = 200 + 6 = 206 \]

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

The correct response is: $206.