You have a corporate bond that pays interest every six months.Its par value is $1,000 and it carries a coupon rate of 10%.What is your accrued interest on the bond if it has been four months since interest was last paid?

Question

Quizplus · Accepted Answer

The bond pays $50 every six months (10% of $1,000 annually, so $50 semi-annually). Since it has been four months since the last payment, the accrued interest is (4/6) * $50 = $33.33.

You Have a Corporate Bond That Pays Interest Every Six