Final answer:
A bond has several parts: face value, coupon rate, maturity date, and present value. The face value is the amount the borrower agrees to pay the investor at maturity. The coupon rate is the interest rate paid on the bond, usually semi-annually. The maturity date is when the borrower will pay back the face value and last interest payment. The present value is the most a buyer would be willing to pay for the bond.
Step-by-step explanation:
In financial terms, a bond has several parts. A bond is basically an "I owe you" note that an investor receives in exchange for capital (money). The bond has a face value. This is the amount the borrower agrees to pay the investor at maturity. The bond has a coupon rate or interest rate, which is usually semi-annual, but can be paid at different times throughout the year. The bond has a maturity date when the borrower will pay back its face value as well as its last interest payment. Combining the bond's face value, interest rate, and maturity date, and market interest rates, allows a buyer to compute a bond's present value, which is the most that a buyer would be willing to pay for a given bond. This may or may not be the same as the face value.