A bond pays a semi-annual coupon and the last coupon was paid 61 days ago.If the annual coupon payment is $75,what is the accrued interest?

Question

Quizplus · Accepted Answer

There are 6 months in a year, so the semi-annual coupon payment is $37.50 ($75/2). 
Accrued interest is the interest that has been earned but not yet paid. Since the last coupon was paid 61 days ago, there are 304 days left until the next coupon payment (365-61=304). 
Accrued interest per day = semi-annual coupon payment / 182.5 (to take into account the 182.5 days in half a year) = $0.2055. 
Accrued interest = $0.2055 x 304 = $62.44. 
Therefore, the best choice is B, $12.57 (rounded to the nearest cent).

A Bond Pays a Semi-Annual Coupon and the Last Coupon