question archive Suppose a bond is priced at $1170, has 17 years remaining until maturity, and has a 7% coupon, paid monthly
Suppose a bond is priced at $1170, has 17 years remaining until maturity, and has a 7% coupon, paid monthly
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Suppose a bond is priced at $1170, has 17 years remaining until maturity, and has a 7% coupon, paid monthly. What is the amount of the next interest payment (in $ dollars)? $ L.
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Solution
We need to find coupon paid per month.
Coupon per year =coupon rate*par value
=7%*1000= 140
Coupon/interest per month= 70/12= 5.83
