Coupon rate: Difference between revisions
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imported>Doug Williamson (Expand example.) |
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== See also == | == See also == | ||
* [[Capped FRN]] | * [[Capped FRN]] | ||
* [[Coupon]] | |||
* [[Current yield]] | * [[Current yield]] | ||
* [[Nominal annual rate]] | * [[Nominal annual rate]] | ||
Latest revision as of 21:55, 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
