A $500 bond refers to a financial instrument issued by a government or corporation, representing a debt obligation. When you purchase a $500 bond, you are essentially lending $500 to the issuer. The issuer promises to repay the principal amount (the $500) at a specified future date, known as the maturity date.

The issuer typically pays periodic interest payments to the bondholder until the bond matures. The interest rate, also known as the coupon rate, is determined at the time of issuance and remains fixed throughout the bond’s life. The frequency of interest payments can vary but is often semi-annual.

Bonds can be bought and sold in the secondary market, where their prices fluctuate based on changes in interest rates, credit quality of the issuer, and other factors. If you hold a $500 bond until maturity, you will receive the $500 principal amount back, assuming the issuer does not default. If you sell the bond before maturity, you may receive more or less than the face value, depending on prevailing market conditions.