Final answer:
The maturity value of a note payable is the amount due at maturity, which includes the face value plus all accrued interest. It represents the total obligation that the borrower will settle at the maturity date of the bond.
Step-by-step explanation:
The face value of a note payable plus total interest is called the maturity value. This term refers to the amount that a bond issuer or borrower agrees to pay back to the investor on the maturity date, which includes both the initial amount borrowed (face value) and the accumulated interest. The other terms mentioned, such as face value, proceeds, and principal, have different meanings in financial contexts.
Face value is the original amount agreed to be paid back at maturity. The principal usually refers to the initial amount of debt owed before interest, while proceeds are the funds that are received from issuing the bond. Both the coupon rate (or interest rate) and maturity date are critical components for calculating the bond's present value, which is the maximum amount an investor is willing to pay for the bond at a given time, based on current market interest rates.