Respuesta :
The coupon rate of the bond is 4.88% for the semi-annual compounding.
An I bond earns hobby month-to-month from the first day of the month to the problem date. The hobby accrues (is brought to the bond) until the bond reaches 30 years otherwise you cash the bond, whichever comes first. The interest is compounded semiannually.
Bonds are issued with the aid of governments and organizations after they want to elevate cash. By buying a bond, you are giving the provider a mortgage, and they comply with paying you again the face price of the loan on a particular date, and to pay you periodic hobby payments along the manner, commonly twice a 12 months.
Bonds can act as an inflation hedge; some buyers purchase bonds together with the collection I financial savings Bonds or Treasury Inflation-included Securities (hints) for this very cause. Both belongings can be effective in controlling for inflation in the end. Bonds also can reduce the volatility of your portfolio's overall performance.
Using a financial calculator enter the value of,
Future value = $10,000
Present value = -$9006.6568
For semi-annual compounding,
Number of years = 8 x 2 = 16 years
YTM = (6.5% / 2) = 3.25%
CPT coupon rate = 2.44% x 2 = 4.88%
Thus, the coupon rate of the bond is 4.88% for the semi-annual compounding.
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