How much will the coupon payments be of a 30-year $10,000 bond with a 4.5% coupon rate and semiannual payments?

Question

Quizplus · Accepted Answer

The coupon rate is 4.5% and semiannual payments means it pays 4.5%/2=2.25% every 6 months.

The total number of coupon payments will be 30*2= 60.

The coupon payments will be ($10,000 * 2.25%)=$225 every six months for 30 years.

So, the total coupon payments over the life of the bond will be $225*60=$13,500.

Therefore, the best choice is B with a coupon payment of $225 every six months.

How Much Will the Coupon Payments Be of a 30-Year