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Describe the value of a bond to someone who is unfamiliar with bonds?

Describe the value of a bond to someone who is unfamiliar with bonds?
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One will value any item depends upon the future benefits he will have from that item.

In order to calculate the value as on today one will discount the amount of future benefits or cash flows at a required rate of return.

So, the value of bond is nothing but the sum of discounted future inflows of cash from the bond.

Value of bond = Present value of Future interest incomes + Present value of maturity amount.

Where present value is calculated by discounting with present value factor at a given reuired rate of return.

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