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Chapter 19. Working with Bonds > Calculating the Coupon Payment

Calculating the Coupon Payment

If you're an income investor, you'll want to know how much interest your investments earn each year. For your bonds, you'll want to know not only how much interest you make each year, but also how much interest you earn each coupon period. This is important not only so that you can monitor and plan for your clash-flow needs, but also because you probably want to reinvest the interest to get the compounding effect.

Fortunately, calculating the interest paid in each coupon period is simple:


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