Coupon rate
Okay kiddo, imagine that you have some money and you want to lend it to someone. But you don't just want to give it away for free, right? You want to get something in return for letting them borrow your money.
When you lend money to someone, you might get something called a "coupon." That's basically like a special piece of paper that promises to pay you a certain amount of money each year for letting them use your money.
The amount of money that you get each year is called the "coupon rate." So if your coupon rate is 5%, that means that you'll get 5% of the total amount of money that you lent each year.
So let's say you lent someone $100, and your coupon rate is 5%. That means that each year, you'll get $5 (which is 5% of $100) until they pay you back the full amount that you lent them.
Does that make sense, kiddo?
When you lend money to someone, you might get something called a "coupon." That's basically like a special piece of paper that promises to pay you a certain amount of money each year for letting them use your money.
The amount of money that you get each year is called the "coupon rate." So if your coupon rate is 5%, that means that you'll get 5% of the total amount of money that you lent each year.
So let's say you lent someone $100, and your coupon rate is 5%. That means that each year, you'll get $5 (which is 5% of $100) until they pay you back the full amount that you lent them.
Does that make sense, kiddo?
Related topics others have asked about: