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Investments & Financial Planning

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  4. How is accrued interest calculated on a bond ?

How is accrued interest calculated on a bond ?

Interest that has accumulated between the most recent payment and the sale of a bond or other fixed income security. At the time of a sale, the buyer pays the seller the bonds price plus any "accrued interest". The accrued interest is calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment.

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