Buying Bonds At A Discount Apr 2026

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The bond still paid a fixed interest rate (coupon) based on the original $1,000. While new buyers were getting 5%, Arthur’s effective yield-to-maturity was nearly double because he had paid so much less for the same interest check. buying bonds at a discount

By buying at $650, Arthur had unlocked a double-sided gold mine: AI responses may include mistakes

Fast forward five years. The utility company hadn't just survived; it was thriving. As the "fear" evaporated, the bond's price climbed back toward its $1,000 face value. 000 face value.