How to Find the Interest Rate on a Bond
- 1). Divide the interest paid per period by the cost of the bond. For example, if a bond is priced at $3,000 and pays you $120 each payment, you would divide $120 by $3,000 to get 0.04.
- 2). Multiply the rate per period by the number of bond payments per year. For this example, if the bond paid interest semiannually you would multiply 0.04 by 2 to get 0.08.
- 3). Multiply the rate from step 2 by 100 to convert from a decimal to a percentage. Finishing the example, you would multiply 0.08 by 100 to get an 8 percent annual interest rate.
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