What is a BOND

Bond is a piece of paper that says I, the borrower agree to pay you the owner, a certain amount
of money in the future. There are many types of bond but they can be broadly gauged in two
categories.
Deep discount bond : these bonds pay no interest but are sold at a discount to face value
to make up for the interest payment. For example a bond which says that it will pay 1000$ at
2030 might be sold for 250$ today. So interest and principal will be paid at that point of time in
the future.
Second type is the one that pays interest periodically that is called coupons in bond
world.