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Accounting for Merchandising Activities
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Contract Rate

The total amount of interest paid each year is calculated by multiplying the face value of the bond x stated annual interest rate (also known as the contract rate or nominal rate/ coupon rate). This interest can be paid quarterly (every 3 month), semi-annually (every 6 months) or annually (every 1 year). To learn more about Contract rates, go to this tutorial on present value of a bond discount.

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