# Discount bond coupon rate

##### *2019-08-22 08:11*

Coupon tells you what the bond paid when it was issued, but the yield to maturity tells you how much it will pay in the future, and that's important.The discount rate is used to create a present value factor, which is applied to the payment of streams. For example, if a 100 bond is a zerocoupon, oneyear bond paying 10 percent interest, the only payment made is the repayment of the 100 principal plus 10 in interest. This occurs at the end of year 1. discount bond coupon rate

When a bond is issued, it pays a fixed rate of interest called a coupon rate until it matures. This rate is related to the current prevailing interest rates and the perceived risk of the issuer. When you sell the bond on the secondary market before it matures, the value of the bond, not the coupon