Question

Cybernaut Industries is buying back bonds which have an annual coupon payment of $300. The coupon was paid just 92 days earlier. How much accrued interest from the coupon payment will Cybernaut have to pay on each bond?

Answer 1

$75.62

Explanation:

Assuming exact interest is computed on each bond, interest will have accrued for 92 of 365 days between payments. The interest due on each bond is ...

(92/365)($300) ≈ $75.62