Bonds are securities that can be easily bought and sold. The bond issuer pays the interest rate mentioned in the indenture, which
is the contract rate. The contract rate is also referred to as the coupon rate, stated rate, or nominal rate.
To complete this assignment:
1. Review the Effective Interest method of amortization.
2. Think about how the purpose of the Effective Interest method relates to the amortization of bond premiums and discounts.
Note: The length of your response should be a minimum of 275 words.
Post your response:
That describes both how the Effective Interest method of amortization works; and how its purpose relates to the amortization of
bond premiums and discounts.