Question

A General Power bond carries a coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. (Assume annual interest payments.) a. What interest payments do bondholders receive each year

Answer 1

$80

Step-by-step explanation:

The computation fo the amount of the interest payment that bondholders received each year is shown below:

= face value of the bond × coupon rate

= $1,000 × 8%

= $80

We assume the face value of the bond be $1,000

We simply applied the above formula

And, the same is to be considered