Assume that you purchase a $1,000 corporate bond that pays 10¾ percent interest.What is the amount of interest that you receive each year?

Question

Quizplus · Accepted Answer

To calculate the amount of interest you receive each year, you need to multiply the face value of the bond ($1,000) by the interest rate (10.75% or 0.1075).

$1,000 x 0.1075 = $107.50

However, since this is an annual interest payment, you receive $100.75 each year.

Assume That You Purchase a $1,000 Corporate Bond That Pays