Question

Lori bought a bond with a face value of $20,000 and a coupon rate of 9.5%. The bond will mature in 20 years .

How much interest will she recieve semiannually ?

A.380
B.950
C.1140
D. 1900

Answer 1

The answer is B. 950. Calculating the coupon interest using the coupon rate formula of face value multiplied by the coupon rate then divided by the period, mathematically expressed as (20000*0.095)/ 2 since it is semi-annual, yields to an answer of 950.