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What amount of interest is paid per year on a 20-year, 7 percent coupon corporate bond with a $1,000 face value and semiannual interest payments

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hyderali230

Answer:

The Interest of $70 is paid per year.

Explanation:

The coupon rate is the rate of interest that is offered to the bondholder against the purchase of the bond for a specific period of time.

Payment of Interest is made using the coupon rate and face value of the bond . We use following formula to calculate the payment of the interest.

Payment of Interest = Coupon rate x Face value of the bond

Payment of Interest = $1,000 x 7%

Payment of Interest = $70

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