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A 30-year T-bond was issued on August 1, 2005, with a coupon rate of 5.45%. If...

A 30-year T-bond was issued on August 1, 2005, with a coupon rate of 5.45%. If you purchased the bond in the secondary market today (Mar. 26, 2020), how much do you receive in accrued interest?

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Answer #1

Assuming face Value of Bond to be $1000

Annual coupon Payment = 1000*5.45% = $54.5

As bonds are issued on Aug 1, Coupon Payments are made at 31st July of each year.

- You purchased the bond from secondary market on Mar 26, 2020

No of days from Coupon payment date to purchased date = 239 days

Accrued Interest = Annual coupoon payment*No of dyas/365

= $54.5*239/365

Accrued Interest = $35.69

If you need any clarification, you can ask in comments.    

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