Coupon rate
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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
