Ivan bought a $1000 bond with a 4.5% coupon that matures in 30 years. What are Ivan's total earnings for this bond when it reaches its maturity date?

A. $900.00
B. $450.00
C. $135.00
D. $1350.00

@djaydeej88 @ganeshie8

Question

Ivan bought a $1000 bond with a 4.5% coupon that matures in 30 years. What are Ivan's total earnings for this bond when it reaches its maturity date?

A.	$900.00
 		B.	$450.00
 		C.	$135.00
 		D.	$1350.00

@djaydeej88  @ganeshie8

tkhunny · Answer

Is there a reinvestment assumption?

1000*.045/2 = 22.5 <== 60 of those.  Is there anything else?

anonymous · Answer

i think it's missing the purchase price of the bond.  is $1000 the par value?

tkhunny · Answer

My guess is that it is both, since there is no information.  Tough call, though.

anonymous · Answer

D.	$1350.00