A bond matures in 2020 and has an annual coupon of 3.65 percent, payable on January...
A bond matures in 2020 and has an annual coupon of 3.65 percent, payable on January 1 and July 1. The current price of the $1,000 bond is $978. On February 1, you purchase $10,000 face amount, and your broker charges a $25 commission. How much must you remit for the purchase?
Homework Answers
The Accrued interest for 31 days (January 1 to January 31) = (10000 x3.65%)/365*31 = $31
Total amount has to be remit =$9,780+25+31 = $9,836.
Assuming that purchase date and settlement date are same.
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