A bond is sold at a face value of $200

Question

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)
Responses

$200
200 dollars

$6
6 dollars

$406
406 dollars

$206
206 dollars

Answer 1

To calculate how much the bondholder will receive at maturity, you need to consider the face value of the bond and the interest earned over the one-year period.

The face value of the bond is $200, and the annual yield (interest) is 3%.

Interest earned in one year = Face Value × Annual Yield
Interest earned = $200 × 0.03 = $6

At maturity, the bondholder receives the face value plus the interest earned:

Total payment = Face Value + Interest earned
Total payment = $200 + $6 = $206

Therefore, the bondholder will have received a total of $206.