Table of Contents### Calculating the Accrued Bond Interest

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When you purchase a bond, the total cost isn't just the price of the bond multiplied by the number of bonds. Your broker might charge a fee, of course, but you need to consider another charge: the accrued interest. This is the portion of the next coupon payment that you owe to the previous bondholder. For example, suppose that a $1,000 face value bond has a 10% coupon with semiannual payments, which means that each payment is worth $50. If you purchase the bond halfway through the current coupon period, you owe the previous bondholder half the interest payment, or $25.

To calculate the accrued interest, you divide the number of days since the previous coupon payment—the `COUPDAYSBS()` calculation—by the number of coupon days in the current period—the `COUPDAYS()` calculation—and multiply the result by the coupon payment: