Question

Suppose that Ford issues a coupon bonds at a price of $1,000, which is the same as the bond's par value. Assume the bond has a coupon rate of 3%, pays the coupon once per year, and has a maturity of 15 years. If an investor purchased this bond at the price of $1,000, for each year except the last year, the investor would receive a payment of $ 30. (Round your answers to the nearest dollar.) When the bond matures, the investor would receive a final payment of $ (Round your answers to the nearest dollar.)

Answer 1

Solution:

When the bond matures. the investor would receive a final payment of = Face value + Last year interest

= $1,000 + ($1,000*3%) = $1,030