Financial Technology Center - School of Business - Central Connecticut State University

An annual coupon bond with a $1,000 face value matures in 10 years. The bond currently sells for $903.7351 and has a 9 percent yield to maturity.
What is the bond’s annual coupon rate?

Inputs:

We must solve for the payment and infer the coupon rate from that value.

the coupon rate = The Annual Payment / The Par Value

N = 10 * 1 .
I = 9 / 1 .
PV=-903.7351 .
FV= 1000 .

Financial calculator solution 

Output:  PMT = 75

the coupon rate is $75/$1,000 =0.075= 7.5%.