 Tutorial
Added on: October
5th , 2006
Fixed rate bonds are what the name implies,
they provide a fixed coupon interest payment at
each period (monthly, quarterly, semi-annually or
annually) for a certain # of years up until maturity.
Upon maturity, fixed rate bonds pay back the entire
original principal amount. Go here to learn more
about bond debt securities. (View
Full Tutorial)
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 Tutorial
Added on: October
5th , 2006
Imagine you borrow $10,000 now at a rate
of 12% interest annually, for the next 30 years.
You will therefore pay 0.12 x $10,000 = $1200 per
year for the next 30 years. At the end of the 30
years, you will also pay back the original $10,000
(principal amount). What is the total amount you
have paid?
$1200 per year x 30 years = $36000 (interest payments)
$10,000 (original principal)
Total payments = $36,000 + $10,000 = $46,000
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