Question

Esperanza holds a bond for 10 years that has a 4% coupon rate and a $2000 par value. How much interest would Esperanza receive if she purchased the bond?

Answer 1

Answer: $800

Explanation:

Esperanza holds a bond for 10 years with a 4% coupon rate and a $2000 par value.

From the question,

Principal= $2000

Rate= 4%

Time= 10 years

Interest= (Principal×Rate×Time)/100

= (2000×4×10)/100

=80000/100

= $800

Esperanza will receive $800 if she purchased the bond