Calculate the annual interest that you will receive on the described bond.
A $1500 Treasury bond with a current yield of %5.2 that is quoted at 107 points
What's the annual interest?
To calculate the annual interest on a bond, you need to multiply the face value of the bond by the coupon rate (expressed as a decimal). The coupon rate is the annual interest rate that the bond pays.
In this case, you have a $1500 Treasury bond with a current yield of 5.2%, which we'll assume is the coupon rate. However, we need to convert the current yield from a percentage to a decimal. To do this, divide the percentage by 100:
Current yield = 5.2% / 100 = 0.052
Now, multiply the face value of the bond by the coupon rate:
Annual interest = $1500 * 0.052 = $78
Therefore, the annual interest on the bond is $78.