Effective Annual Interest Rate: Definition, Formula, and Example
Conversely, bonds with lower coupon rates often sell for less than par, making them discount bonds. Because the purchase price of bonds can vary so widely, the actual rate https://www.bookstime.com/ of interest paid each year also varies. The effective interest method of amortization causes the bond’s book value to increase from $95,000 on Jan. 1, 2017, … Read more