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Discover the essentials of bonds, including corporate and government bonds. A bond is a formal pledge by a government or corporation to repay a specific sum of money with interest. Learn how these financial instruments work, including how investing in a corporate bond can yield returns over time. For example, purchasing a $1,000 AT&T bond at 7.5% interest yields $75 annually for 15 years, totaling $1,125. Explore where and how to buy government bonds and how to access your bond information online at www.savingsbonds.gov.
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What are they? CORPORATE BOND GOVERNMENT BOND written pledge of a government or municipality (city) to repay a specific sum of money with interest • a corporation’s written pledge to repay a specific amount of money, along with interest.
How BONDS Work: • You pay $1,000 for a 15 year AT&T Bond at 7.5% interest/year. • Each year, you get $75 (1000*.075) • After 15 years, you get your $1000 back TOTAL EARNED = $75*15 years = $1125
How to buy government bonds, or look up your bond info: • www.savingsbonds.gov