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The face value of bonds usually represents the principal or redemption value. Interest payments are expressed as a percentage of face value. Before maturity, the actual value of a bond may be greater or less than face value, depending on the interest rate payable and the perceived risk of default.
Issued at a discount of the face value, the bonds could be redeemed for the full face value when the bond matured after a number of years that varied with the interest rate at the time of issuance. If not redeemed at maturity, the bonds would continue earning interest for a total of 40 years if issued before December 1965, or for 30 years if ...
Redemption value is the price at which the issuing company may choose to repurchase a security before its maturity date. [1] A bond is purchased "at a discount" if its redemption value exceeds its purchase price. It is purchased "at a premium" if its purchase price exceeds its redemption value. [1] Thus, the right will only be exercised at a ...
Bonds are sold at less than face value, for example, a $50 Series EE bond may cost $25. Bonds accrue interest, and your gains are compounded , meaning that interest is earned on interest.
ABC Company issues callable bonds worth $1,000 with a 5% coupon rate (interest rate). The bond will mature in 2055 (30 years) but it can be called after 5 years at 102% of its value — $1,020.
The first Series E bonds were sold at 75 percent of their face value and returned 2.9 percent interest, compounded semiannually. Denominations ranged from $25 to $1,000.
Par value also refers to the official gold content of a currency. The Act to Amend the Par Value Modification Act of 1973 of September 21, 1973 lowered the par value of the dollar against gold from $38 to $42.2222 where it remains today. This is why the face value of a 1 oz gold coin is $50, reflecting the par value of the dollar in gold.
The value of a paper savings bond can be checked by using the savings bond calculator on the TreasuryDirect website and entering this information found on bond: Issue date Bond series