Question

g Suppose a bond is priced at $1035, has 12 years remaining until maturity, and has a 12% coupon, paid monthly. What is the amount of the next interest payment (in $ dollars)

Answer 1

Answer:

$10

Explanation:

As the bond is priced at $1035, the par value is $1000.

Calculation of the amount of the next interest payment

= Par value * Coupon rate/12

= $1000 * 12%/12

= $1000 * 1%

= $10

So, the amount of the next interest payment is $10.