Assume that you purchase a $1,000 bond issued by Kohls that pays 8% interest each year, paid every 6 months. What is the amount of each interest payment?

Question

Quizplus · Accepted Answer

The bond pays 8% interest annually, paid every 6 months. Therefore, the semi-annual interest payment would be (8%/2) = 4%. 
To calculate the interest payment amount: 
Interest payment = principal x interest rate 
Interest payment = $1,000 x 4% = $40. 
So, the amount of each interest payment is $40.

Assume That You Purchase a $1,000 Bond Issued by Kohls