On the bond's maturity date, its face value will equal the:
A) maturity value plus all interest payments.
B) maturity value less all interest payments.
C) present value of the bonds on its issuance date.
D) maturity value.

Question

Quizplus · Accepted Answer

The face value or the principal amount of a bond is the amount that the issuer agrees to pay the bondholder at maturity. On the maturity date, the bond's face value will be repaid to the bondholder regardless of the interest payments received over the life of the bond. Therefore, the maturity value of a bond equals its face value, which is the amount that the issuer of the bond owes the bondholder at maturity.

On the Bond's Maturity Date, Its Face Value Will Equal