Answer:
8.68%
Explanation:
For determining the coupon rate first determined the PMT
Given that
Future value = $1,000
NPER = 30 × 2 = 60
RATE = 7.75% ÷ 2 = 3.875%
Present value = $1,107.20
The formula is shown below:
=PMT(RATE;NPER;-PV;FV;TYPE)
The present value comes in negative
After applying the above formula, the monthly payment is $43.38
The annual monthly payment is
= $43.88 × 2
= $86.75
Now the coupon rate is
= $86.75 ÷ $1,000
= 8.68%
