Question

Calculate the annual interest that you will receive on the

described bond. a $1000 treasury bond with a current yield of 4.5%
that is quoted at 106 points. the annual interest is $?

Answer 1

To calculate the annual interest on the bond, multiply the face value of the bond by the current yield. In this case, the annual interest is $47.70.

Step-by-step explanation:

To calculate the annual interest on the bond, we need to use the current yield and the bond's face value. The current yield on the bond is given as 4.5%, and the bond is quoted at 106 points.

To find the face value of the bond, we divide the quoted price by 100 and multiply it by the face value. In this case, the face value is $1000. So, the face value of the bond is $1060 ($1000 x 106/100).

To calculate the annual interest, we multiply the face value of the bond by the current yield. So, the annual interest on the bond is $47.70 ($1060 x 4.5%).