Samuel owns a bond with a par value of $5,000 and a coupon rate of 5 percent. He will receive _____ in annual interest until the bond reaches maturity or until he sells the bond to someone else.

Name: Samuel owns a bond with a par value of $5,000 and a coupon rate of 5 percent. He will receive _____ in annual interest until the bond reaches maturity or until he sells the bond to someone else.
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Question

Quizplus · Accepted Answer

The annual interest can be calculated as:
Coupon rate x Par value = Annual interest
5% x $5,000 = $250

Samuel Owns a Bond with a Par Value of $5,000