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The principal of a bond is the amount of a bond that interest rates are paid on by the person issuing it.

I like to think of it as the initial amount the bond is worth.

Example: Hudson Corporation issued a $10,000 bond at 14% interest. The $10,000 is the principal of the bond.

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13y ago

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What is the connection between a bond principal and interest?

The bond principal is the initial amount borrowed by the issuer, while the interest is the payment made by the issuer to the bondholder for the use of the principal. The interest is usually a fixed percentage of the principal amount and is paid at regular intervals until the bond matures.


What is the difference between the bond's principal and the bond's par value?

The bond's principal refers to the initial amount borrowed by the issuer and repaid at maturity, while the bond's par value is the face value of the bond that is used to calculate interest payments. In most cases, the principal and par value are the same, but they can differ if the bond is issued at a discount or a premium.


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A bond that repays principal in one single payment at maturity is known as a bullet bond.


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What is face value of a bond?

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Who are parties to a surety bond?

There are typically three parties involved in a surety bond: the principal (person/organization required to obtain the bond), the obligee (entity requiring the bond), and the surety (company providing the financial guarantee). The principal purchases the bond to assure the obligee that they will fulfill their obligations, with the surety company backing this guarantee.


Who is Obligee on contract bond?

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A surety bond or surety is a promise to pay one party a certain amount if a second party fails to meet some obligation, such as fulling the terms of a contract which is the main purpose of surety bond.


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A FICO strip bond serves the same purpose a regular savings bond. However, with a FICO strip bond, you can hold individual interest and principal components .


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