To solve the problem, we need to calculate the total return earned by the bond. The total return is based on the simple interest formula:

$\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}$

Known Values:

• Face Value (Principal) = $14,000
• Annual Interest Rate (Rate) = 8.18% = 0.0818
• Time to Maturity (Time) = 6 months = $\frac{6}{12} = 0.5$ years

Step-by-Step Solution:

1. Apply the formula: $\text{Interest} = 14,000 \times 0.0818 \times 0.5$

2. Perform the calculation: $\text{Interest} = 14,000 \times 0.0409 = 573.00$

Final Answer:

The total return earned by this bond is $573.00.

Would you like a detailed breakdown of any part of this calculation?

Relative Questions:

1. How is simple interest different from compound interest in bond calculations?
2. What would be the return if the term to maturity was one year instead of six months?
3. How does changing the annual interest rate affect the total return?
4. How can this calculation be applied to bonds with monthly compounding?
5. What are the risks involved in investing in bonds with such interest rates?

Tip:

Always ensure the time is expressed in years when calculating interest with annual rates.