Question

If a bond from the franchise Green's Galor has a coupon's rate of 5%, par value of $2000, and will mature in 5 years, how much will the company pay the holder when it retires the debt

Answer 1

Answer:

2100

Explanation:

Every single year during the 5 years the company will be paying a coupon of 5% equivalent to 100$. The last year, year 5, the company will pay the corresponding coupon of 100$ but additionally will return the face value of 2000$. Therefore, in year 5, the company pays 2100$