you would expect a bond of the u.s. government and a bond of an eastern european government to pay different interest rates because of differences in the bonds'tax treatments . you would expect a bond that repays the principal in year 2040 to paya lower interest rate as compared to a bond that repays the principal in year 2020. you would expect a bond from a software company you run in your garage and a bond from coca-cola to pay different interest rates because of differences in the bonds'credit risks . you would expect a bond issued by the federal government and a bond issued by new york state to pay different interest rate because of differences in the bonds' .