Total Return at Maturity

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Acecustis

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Jul 31, 2010
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I'm sure when I was in college I knew how to solve this problem, but for the life of me I can't remember the formula.

If you purchase a 10 year, $15000.00 bond with an annual coupon rate of 6%, what is your total return at maturity?

I keep thinking it is FV = PV(1 + r)^n or FV = 15000(1 + .06)^10

But that gives me 26850. The right answer is supposed to be $9000. What am I doing wrong? Someone please help!
 
Acecustis said:
I'm sure when I was in college I knew how to solve this problem, but for the life of me I can't remember the formula.

If you purchase a 10 year, $15000.00 bond with an annual coupon rate of 6%, what is your total return at maturity?

I keep thinking it is FV = PV(1 + r)^n or FV = 15000(1 + .06)^10

But that gives me 26850. The right answer is supposed to be $9000. What am I doing wrong? Someone please help!
Click to expand...
\(\displaystyle $15,000.00\ @\ 6\%\ for\ 10\ years = 15,000 * .06 * 10 = 9,000.\)

You were overthinking the problem.
 
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