You purchase 2,500 bonds with a par value of $1,000 for $985 each. The bonds hav

Question

You purchase 2,500 bonds with a par value of $1,000 for $985 each. The bonds have a coupon rate of 7.7 percent paid semiannually, and mature in 10 years. How much will you receive on the next coupon date? How much will you receive when the bonds mature?

You purchase 2,500 bonds with a par value of $1,000 for $985 each. The bonds have a coupon rate of 7.7 percent paid semiannually, and mature in 10 years. How much will you receive on the next coupon date? How much will you receive when the bonds mature?

Explanation / Answer

Answer:

At next coupon date the interest t be receivables = 2500 bonds * $1000 * 7.7%*6/12 =$96250

Amount to be received at maturity = Face value + Interest

= 2500 bonds *$1000 + $96250

=$2596250

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