PLEASE ANSWER THIS ONE: QUESTION 5. A bond
with a 800,000-peso face value has a 4% coupon and a 5-year
maturity date. Calculate the total of the interest payments paid to
the bondholder.
***Important note: The attached picture is for guidance
purposes; it is a sample problem to help you solve the question
above and contains the expected method to be used in solving the question.
Please Answer This One Question 5 A Bond With A 800 000 Peso Face Value Has A 4 Coupon And A 5 Year Maturity Date Ca 1 (66.31 KiB) Viewed 15 times
Example: A bond with a 500,000-peso face value has a 3% coupon and a 5-year maturity date. Calculate the total of the interest payments paid to the bondholder. Solution: Use the simple interest formula to find the annual interest payments. Substitute the following values into the formula: P = 500,000, r = 0.03, and t = 1. I = Prt = 500,000 (0.03) (1) = 15,000 pesos Multiply the annual interest payment by the term of the bond (5 years). 15,000 x 5 = 75,000 pesos The total of the interest payments paid to the bondholder is 75,000 pesos.
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