On January 1, 2015, Carvel Corp. issued five-year bonds with a face value of $500,000 and a

Question:

On January 1, 2015, Carvel Corp. issued five-year bonds with a face value of $500,000 and a coupon interest rate of 6%, with interest payable semi-annually. How much would Carvel receive from the sale of these bonds if the market interest rate was

(a) 5%,

(b) 6%,

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...