Investing in bonds is a way to lend money to a corporation or government. In return, you get paid interest, usually semi-annually, and the principal of the bond at its maturity (a specified future date). The bond price at issue is called its face value, usually in the amount of \$100 as a base price. The interest rate of a bond is called the coupon rate. The interest payment of a bond is called its coupon payment. The equation to calculate the coupon payment is the same as the equation to calculate simple interest: I = n ´ P ´ r ´ t where I = coupon payment n = number of bonds purchased P = bond price r = coupon interest t = time (semi-annually)  For retirement income, Deborah’s grandmother wants to invest \$10,000 in the Disney bonds . The listed price of the bond is \$100 with a yield of 8.5% (coupon rate). How much money will her grandmother receive semiannually? I = n ´ P ´ r ´ t where n ´ P = 10,000 r = 0.085 t = 0.5 (year) therefore, I = 10,000 ´ 0.085 ´ 0.5   = \$425 Deborah’s grandmother will receive a check of \$425 from Disney every six months. Michelle paid \$9,525 for Treasury Bills (T- Bills) with a total face value of \$10,000 and a maturity of one year. What return (yield) will that provide? Estimate the answer: Less than 4% Between 4% and 5% Over 5%