Answer:
This question doesn't show what is required to be done with this statement. However, I would provide explanation below on how to approach it.
Explanation:
This type of bond is a coupon-paying bond; meaning, it pays interest to its holders as coupons every year. The coupon rate of 6% can be used to calculate the annual coupon payment in dollars.
Coupon payment amount = Coupon rate * Face value
Coupon rate = 6% or 0.06 as a decimal
Face value = $1,000
Therefore, Coupon payment amount = 0.06*1000
Coupon payment amount = $60
Based on the above calculation, the statement that "annual amount of interest of $600" is incorrect. It should say;
"...annual amount of interest of $60."
