How much will the coupon payments be of a 20-year $500 bond with a 8% coupon rate and quarterly payments?

Question

Quizplus · Accepted Answer

First, we need to calculate the semi-annual coupon payment:

Coupon rate = 8% 
Face value = $500 
Semi-annual coupon payment = (Coupon rate x Face value)/2 = (8% x $500)/2 = $20

Next, we need to calculate the quarterly coupon payment:

Quarterly coupon payment = Semi-annual coupon payment/2 = $20/2 = $10

Therefore, the coupon payments will be $10 each quarter.

How Much Will the Coupon Payments Be of a 20-Year