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Perpetuity, Sinking Funds & Bonds · Question 33 of 63

Question 33

EasyOriginal question

A bond has a face value of ₹1,000 and a coupon rate of 8% a year, paid yearly. How much interest does it pay each year?

Options for question 33

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. The coupon is the coupon rate times the face value.

  2. 0.08×1,000=800.08 \times 1{,}000 = 80 rupees a year.

Worth noting

₹1,080 adds back the face value, which is repaid only at maturity.

Concept
The coupon payment
Typical time
60 s
Your time
—
The rule this testsBonds and their terms
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