Jovan bought a bond with a face value of 15,000 and a coupon rate of 8.5%. The bond will mature in 15 years. How much interest will he receive semiannually

Answer

19,125

Explanation

The value of bond has an interest of 8.5% annually. Monthly it will be 8.5/2%=4.25%

The initial value of bond is 15,000.

The formula for calculating the interest is;

Interest=PRT

Where p is the money deposited, R is the interest rate and T is the period.

Since the interest semiannually for 15 years, the interest period is (15*2) = 30.

Interest=15,000*0.045*30

=19,125.