A 1000 par value bond makes two interest payments each year of $45 each. What is the bonds coupon rate?

Question

A 1000 par value bond makes two interest payments each year of $45 each. What is the bonds coupon rate?

Answer 1

Let a = rate of interest pay annually

1000 X  a%  = 90

a = 9%

mean,9% interest rate pay per annum,or

          4.5% interest rate pay semi-annually

Answer 2

4.5% semi annually which is 9% annual.

Answer 3

Annual interest equals $90

$1000 bond

$90 divided by $1000 equals .09 (which equals 9%)