Question

scenario 4: a bond with a $10,000 face value matures in 6 years and has a coupon rate of 7%, paid annually. create the payout table.
double - click the light blue cells to edit them.
day 1
0.5 year
1.0 year
1.5 year
2.0 year
2.5 year
3.0 year
3.5 year
4.0 year
4.5 year
5.0 year

Explanation:

Step1: Calculate annual coupon payment

The annual coupon payment \( C \) is calculated as \( C=\text{Face Value}\times\text{Coupon Rate} \). Given face value \( F = 10000 \) and coupon rate \( r=7\%=0.07 \), then \( C = 10000\times0.07=700 \).

Step2: Create the payout table

Year	Coupon Payment	Principal Repayment	Total Payout
2	700	0	700
3	700	0	700
4	700	0	700
5	700	0	700
6	700	10000	10700

Answer:

Year	Coupon Payment	Principal Repayment	Total Payout
2	700	0	700
3	700	0	700
4	700	0	700
5	700	0	700
6	700	10000	10700