Suppose the number of days between two coupon payment dates is 181,the number of days since the last coupon payment is 100,the annual coupon rate is 8 percent and the par value is $100,000,then the accrued interest is $2,210.

Question

Quizplus · Accepted Answer

First, calculate the daily coupon rate:
8% / 365 = 0.022%

Then, calculate the accrued interest:
0.022% * $100,000 * 100 = $2,200

Since 100 days have passed since the last coupon payment, the accrued interest is $2,200 * (100/181) = $2,210. Therefore, the statement is true.

Suppose the Number of Days Between Two Coupon Payment Dates