Find Jim’s profit if he buys twenty $1000 OPR bonds in 2020 that mature in 2046 (see Table 3.5) at the closing price, and receives their face value at maturity.  use this chart wrong chart use this one BONDS
BramR 6¾ 29
BurPwr 7½ 43
Dunn 8⅝ 23
Holley 5s 24
Hucks 7s 27
OPR 5⅜ 27
OPR 6½ 46
CUR YLD
6.9
7.8
8.6
Cv
6.9
5.2
6.5
VOL (100's)
34
7
6
51
5
30
13
CLOSE
98.50
96
100
92.75
101
103.38
100
NET CHG
0.88
3.75
0.75
-0.13
-0.50
-0.50

To calculate Jim’s profit, we need to determine how much he spent buying the bonds and how much he receives when they mature.

### 1. Purchase price of the bonds:
- Jim buys **20 OPR 6½ bonds**, which mature in 2046, at the **closing price of 100** in 2020.
- The bond face value is **$1,000**.
- Since the closing price is 100, Jim pays **100% of the face value**, so the cost per bond is $1,000.
  
Total cost of purchasing 20 bonds:
\[
\text{Total cost} = 20 \times 100\% \times 1,000 = 20 \times 1,000 = 20,000
\]

### 2. Amount Jim will receive at maturity:
- When the bonds mature in 2046, Jim will receive the **face value** of each bond, which is $1,000 per bond.
- The total amount he will receive at maturity for 20 bonds is:
\[
\text{Total at maturity} = 20 \times 1,000 = 20,000
\]

### 3. Profit calculation:
- Since Jim bought the bonds at their face value and will receive the same face value at maturity, he doesn’t make any capital gains or losses on the bond principal.
- **Jim's profit is essentially zero** if we only consider the bond price.

However, we are ignoring the **interest payments** (coupons) Jim receives during the 26-year period from 2020 to 2046. OPR 6½ bonds pay **6.5% annual interest** on the face value.

### 4. Interest (Coupon) Payments:
- Jim will receive **6.5% of the face value ($1,000)** per bond each year.
- Annual interest per bond:
\[
\text{Interest per bond per year} = 6.5\% \times 1,000 = 65
\]
- Total annual interest for 20 bonds:
\[
\text{Total annual interest} = 20 \times 65 = 1,300
\]
- Over 26 years, Jim will receive:
\[
\text{Total interest over 26 years} = 26 \times 1,300 = 33,800
\]

### 5. Total Profit:
Jim’s total profit comes from the interest payments. Therefore, his total profit is:
\[
\text{Total profit} = 33,800
\]

### Summary:
- **Total amount spent in 2020**: $20,000
- **Total amount received at maturity**: $20,000 (face value)
- **Total profit from interest**: $33,800

Jim’s profit from the bond purchase is **$33,800** from the interest payments.

Would you like further details or have any questions?

Here are 5 related questions to consider:
1. How does bond yield affect the total return on investment?
2. What is the significance of the coupon rate compared to the market interest rate?
3. How does the bond price fluctuate over time relative to interest rates?
4. What is the difference between the nominal yield and current yield of a bond?
5. How would Jim’s profit change if he sold the bonds before maturity?

**Tip**: Remember, bonds provide returns through both interest payments and potential changes in bond prices.

Find Jim’s profit if he buys twenty $1000 OPR bonds in 2020 that mature in 2046 (see Table 3.5) at the closing price, and receives their face value at maturity.

Learn how to calculate the total profit Jim earns from buying 20 OPR bonds at a closing price of 100 and receiving their face value at maturity. This problem explains bond valuation, interest payments, and investment returns over 26 years. Suitable for students in Grades 9-12.

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