Question

Determine the interest payment for the following three bonds (Assume a $1,000 par value.) (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places): 4.45 percent coupon corporate bond (paid semiannually) $ 5.10 percent coupon Treasury note $ Corporate zero coupon bond maturing in 15 years $

Answer 1

Answer:

Bond 1 : 4.45% Coupon Corporate Bond:

Face Value = $1,000
Annual Coupon Rate = 4.45%
Semi-annual Coupon rate = 4.45%/ 2 = 2.225%

Interest Payment = $1,000 * 2.225%
Interest Payment = $22.25

Bond 2 : 5.10% Coupon Corporate Bond:

Face Value = $1,000
Annual Coupon Rate = 5.10%
Semi-annual Coupon rate = 5.10%/ 2 = 2.55%

Interest Payment = $1,000 * 2.55%
Interest Payment = $25.50

Bond 3: 0% Coupon Corporate Bond:

Face Value = $1,000
Annual Coupon Rate = 0%
Semi-annual Coupon rate = 0%

Interest Payment = $1,000 * 0%
Interest Payment = $0