Coupon rate: Difference between revisions
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imported>Doug Williamson (Classify page.) |
imported>Doug Williamson (Expand example.) |
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The nominal annual rate of interest on a security, expressed as a percentage of the principal amount. | The nominal annual rate of interest on a security, expressed as a percentage of the principal amount. | ||
<span style="color:#4B0082">'''''Coupon rate example'''''</span> | |||
The annual interest payable on a bond is 3. | |||
The principal amount is 100. | |||
Coupon rate = annual interest / principal | |||
= 3 / 100 | |||
= '''3%''' | |||
Working in the other direction: | |||
Coupon rate x principal = annual interest | |||
For example: | |||
3% x 100 = 3 | |||
Revision as of 21:53, 6 August 2020
The nominal annual rate of interest on a security, expressed as a percentage of the principal amount.
Coupon rate example
The annual interest payable on a bond is 3.
The principal amount is 100.
Coupon rate = annual interest / principal
= 3 / 100
= 3%
Working in the other direction:
Coupon rate x principal = annual interest
For example:
3% x 100 = 3
