Question

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?

Answer 1

Answer:

$630 is correct

Explanation:

Answer 2

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.