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    angielynabano's Avatar
    angielynabano Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jan 6, 2011, 01:05 AM
    how to compute bonds with semi-annual payment of interest?
    par value = 1000
    coupon rate = 10%
    maturity = 25 years
    interest rate - 10%

    *required
    1.how much is the expected annual interest?
    2. how much is the interest every 6 months?
    3. how much is the expected par value at the end of 25years?
    manik chand dey's Avatar
    manik chand dey Posts: 63, Reputation: 2
    Junior Member
    		  
    #2

    Jan 6, 2011, 02:06 AM
    par value = 1000
    coupon rate = 10%
    maturity = 25 years
    interest rate - 10%

    *required
    1.how much is the expected annual interest?
    2. how much is the interest every 6 months?
    3. how much is the expected par value at the end of 25years?

    1.expected annual interest is the coupon multiplied by the par value. i.e,10% on 1000, which is 100.
    2. you will get interest of 50 each for 50 times, if interest is paid every 6 months.
    3. expected par value you will get 1000.
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