Face Value

Posted in Finance, Accounting and Economics Terms, Total Reads: 953
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Definition: Face Value

Face value of bond refers to the amount that the investor will be repaid at the end of the maturity period. It is also referred as the par value. It is different from the price of a bond. The price of a bond fluctuates during its maturity period depending on the interest rates. However, the face value/par value remains constant.

If the price of bond is less than face value, it is selling at a discount. If the price is greater than the face value, it is selling at a premium.

 

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