Question

The U.S. National Treasury issued $3 million of 2.7% bonds, due in 10 years, with interest payable annually at year-end. Calculate the annual interest amount that the U.S. National Treasury will pay to the bondholders.

Answer 1

Answer:

$81000

Explanation:

The calculation is simple. Bond interest is simply calculated by multiplying bond value with the assorted interest rate.

For example

A bond with $1000 value with 5% interest is simply 5% of $1000 = $50

Therefore,

$3,000,000 * 2.7% = $81000

(2.7 % = 0.027)

Hope that helps.