corporate bond
corporate bond
The contractual interest rate is the rate at which the borrower pays and the investor receives are determined.
The bank pays it to you. The interest reflects the return on the capital you have loaned to the bank.
The coupon rate on CDs is the fixed interest rate that the issuer pays to the investor. It is expressed as a percentage of the CD's face value and is paid out regularly, typically on a monthly or quarterly basis.
1962
corporate bond
The contractual interest rate is the rate at which the borrower pays and the investor receives are determined.
It is interest that is paid separately. For an investor, it is paid out to the investor and not rolled into the investment.
It goes to the investor who buys the bond. A zero coupon bond is a bond in which, the investor need not pay any premium (coupon) above the face value of the bond while purchasing it. Let us say a company issues a $10,000 bond at a discount of 10% with zero coupon, it is enough if the investor pays $9000 to buy the bond. At the time of maturity he would get back $10,000. This 10% discount can be compared to the interest earned on the investment for the investor.
The bank pays it to you. The interest reflects the return on the capital you have loaned to the bank.
simple interest
The coupon rate on CDs is the fixed interest rate that the issuer pays to the investor. It is expressed as a percentage of the CD's face value and is paid out regularly, typically on a monthly or quarterly basis.
1962
A tax deferred fixed annuity pays a flat interest rate.
by purchasing shares in the company
The principle and interest.
The people do.