Creative Solutions Inc. has issued 10 - year face value, annual coupon bonds, with a yield to
maturity of . The annual interest payment for the bond is
A.
B.
C.
D.

Ask by Newton Mccarthy. in the United States

Jan 24,2025

Question

Creative Solutions Inc. has issued 10 - year face value, annual coupon bonds, with a yield to
maturity of . The annual interest payment for the bond is
A.
B.
C.
D.

Ask by Newton Mccarthy. in the United States

Jan 24,2025

UpStudy AI · Accepted Answer

To determine the **annual interest payment** for the bond issued by Creative Solutions Inc., you can use the following formula:

$$
\text{Annual Interest Payment} = \text{Coupon Rate} \times \text{Face Value}
$$

Given:
- **Face Value (FV)** = \$1,000
- **Coupon Rate** = 8%

Plugging in the values:

$$
\text{Annual Interest Payment} = 8\% \times \$1,000 = 0.08 \times \$1,000 = \$80
$$

Therefore, the **annual interest payment** for the bond is:

**A. \$80**

Answer: **A. \$80**
The annual interest payment is \$80.