![]() If a 10-year bond with a par value of $10,000 is issued with semi-annually recurring coupon payments of $50, its principal will be $10,000, exclusive of the $1,000 value of coupon payments over its life.Typically, it doesn’t include any recurring interest payments, coupons, and accrued interest (even though the bond issuer has to pay these). A bond’s principal may also go by the names face value or par value. When debt instruments are involved, the term principal refers to the sum of money the bond issuer borrows and promises to refund the bondholder when the bond matures. ![]() Therefore in this example, the total amount of payoff is $13,000. The added $3,000 would be attributed to accrued earnings. But your remaining amount of principal balance will be the $10,000 you initially deposited.
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