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1 May, 16:11

Eric bought a $500 bond with a 6.3% coupon that matures in 20 years. what are eric's total earnings for this bond when it reaches its maturity date?

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  1. 1 May, 17:04
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    Eric bought a $500 bond with a 6.3% coupon that matures in 20 years.

    let's find our eric's total earnings for this bond when it reaches its maturity date.

    Formula:

    => 500 dollars * 6.3% * 20 years

    => 500 * 0.063 = 31.5 dollars is the coupon

    => 31.5 dollars * 20 years = 630 dollars.

    Thus the amount of her money when it reaches its maturity is 630.
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