Respuesta :
Answer: $42.25
Explanation:
In the case of a par bond,
Coupon rate = Yield rate
Since the effective annual yield has been given in the question, we need to find out the periodic yield that will be equal to the semi annual coupon rate.
Therefore, Effective annual rate = (1 + Semi Annual rate)^2 - 1
0.086285 = (1 + Semi Annual rate)^2 - 1
Semi Annual rate = (1.086285)^(1/2) - 1 = 4.225%
Semi annual coupon rate = 4.225%
Semi annual interest payment = 4.225% x 1000 = $42.25
= 0.04225 × 1000 = $42.25
A bond is an instrument that expels the fixed amount of interest to the borrowers or the investors. Bonds are the instruments for the company to raise funds for the company to expand or add some aspect in it. The owners of the bonds are known as the debtholders or creditors or the issuer.
When the face value of bonds is $ 1000, the number of interest payments is $42.25
In the case of a par bond,
Coupon rate = Yield rate
we need to find out the periodic yield that is equal to the semi-annual coupon rate.
[tex]\text{Therefore, Effective annual rate} = (1 + \text{Semi Annual rate})^{2} - 1[/tex]
[tex]0.086285 = (1 + \text{Semi Annual rate})^{2} - 1[/tex]
[tex]\text{Semi Annual rate} = (1.086285)^{1/2} - 1 = 4.225\%[/tex]
[tex]\text{Semi annual coupon rate}= 4.225\%[/tex]
[tex]\text{Semi annual interest payment} = 4.225\% \times 1000 =\$42.25[/tex]
[tex]= 0.04225 \times 1000 = \$42.25[/tex]
To know more about the calculation of the semi-annual rate, refer to the link below:
https://brainly.com/question/15079823
