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a 9-year bond is issued with the following terms: face value: $1,200,000 annual coupon rate: 12% market rate: 15% what is the amount of the semiannual interest annuity paid under this bond?

Sagot :

The semi-annual interest annuity paid under the bond is $72,000

What is the semi-annual interest annuity?

A bond is a debt instrument used by businesses to raise capital needed for business operations.

Bondholders earn interest on the amount invested and at the maturity of the bond, they are paid back the amount invested. The interest that is paid is a function of the coupon rate of the bond.

The semi-annual interest annuity is the amount that would be paid twice in a month.

The semi-annual interest annuity = (annual interest rate / 2) x face value

The semi-annual interest annuity = (12% / 2) x $1,200,000

The semi-annual interest annuity = 6% x $1,200,000

The semi-annual interest annuity = 0.06 x $1,200,000

The semi-annual interest annuity = $72,000

To learn more about bonds, please check: https://brainly.com/question/13326746

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