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

637.50

Explanation:

Answer 2

Answer: Jovan will receive $637.50 semiannually.

The coupon rate on a bond is the amount of interest that is paid to the bond holder annually.

To find the interest, we multiply: 0.085 x 15000 = 1275

However, we must now divide by 2 because the interest in semiannually.

1275 / 2 = 637.5