Bond Payments.
Bernie purchased 20 bonds with par values of $1,000 each. The bonds carry a coupon rate of 9% payable semiannually. How much will Bernie receive for his first interest payment? 2. Annual Interest. Paul has $10,000 that he wishes to invest in bonds.
He can purchase Treasury bonds with a coupon rate of 7% or municipal bonds with a coupon rate of 5.5%.
Paul lives in a state with no state income tax and has a marginal tax rate of 25%. Which investment will give Paul the higher annual interest after taxes are considered?