What is the sum of money that a corporation promises to pay at the expiration of a bond commonly known as?

The sum of money that a corporation promises to pay at the expiration of a bond is commonly known as the face value. This term refers to the nominal value of the bond as stated on the bond certificate, representing the amount that the issuer agrees to repay the bondholder at maturity.

Understanding the importance of face value is crucial in the context of bond investing. It is the starting point for calculating interest payments, typically expressed as a percentage of the face value (the coupon rate). Additionally, the face value is a key concept for understanding how bonds are priced in the market compared to their original issue price.

While other terms like principal amount may seem relevant, they generally refer to specific contexts or other forms of debt. Market value pertains to the current trading price of the bond in the market, which can fluctuate based on interest rates and other economic factors, and the interest rate relates to the cost of borrowing rather than the actual sum to be paid at maturity. Therefore, face value is the precise term for the total amount due to bondholders when the bond matures.