If a bond has a face value of $5,000 and a contractual interest rate of 6 percent, then the interest paid semi-annually will be $150.

Question

Quizplus · Accepted Answer

To calculate the interest paid semi-annually, we need to find half of the contractual interest rate and multiply it by the face value of the bond.

Half of 6% is 3%.

$5,000 x 0.03 = $150

Therefore, the interest paid semi-annually will be $150, making option A true.

If a Bond Has a Face Value of $5,000 and a Contractual