Question

Kayla is considering investing in a bond with a face value of $12,000 with a coupon rate of 12% payable on a monthly basis. If she can get a 2.5% return per quarter on her money, what are the monthly payments that she can receive from the bond

Answer 1

Answer:

The answer is "$ 120"

Explanation:

Given value:

$\text{Monthly payment= Face value} \times \frac{\text{Coupon rate}}{12}$

                            $= \ 12,000 \times \frac{12 \%}{12}\\\\= \ 12,000 \times \frac{0.12}{12}\\\\= \ 1,000 \times 0.12\\\\= \ 120$