Question

Jovan bought a bond with a face value of 15,000 and a coupon rate of 8.5%. The bond will mature in 15 years. How much interest will he receive semiannually

Answer 1

637.5, the other answer is telling you how much interest total, but it's only asking for the semiannual amount, which is $637.50

Explanation:

just took the test

Answer 2

Answer
19,125

Explanation
The value of bond has an interest of 8.5% annually. Monthly it will be 8.5/2%=4.25%
The initial value of bond is 15,000.
The formula for calculating the interest is;
Interest=PRT
Where p is the money deposited, R is the interest rate and T is the period.
Since the interest semiannually for 15 years, the interest period is (15×2) = 30.

Interest=15,000×0.045×30
=19,125.