Question help if you bought a 20minus−year bond issued by the government, with a par value of $1,000 and an interest rate of 8%. at maturity you will be returned the principal of
Pricipal amount P = 1000
Interest rate = 8%
Period n = 20 - year = 8
r = periodic rate = 0.08 x8 = 0.64
So now value at maturity V = P * (1 + r)^n
V = 1000(1 + 0.64)^8 => V = 1000 * 52.33 = $52330
