Question 1164760
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You have your terminology wrong.  You cannot compound interest unless the interest paid by the borrower is allowed to remain in the account so that interest accrues against the interest paid.  So if the interest goes to the bondholders each quarter, then the interest paid is simple interest, not compound interest.  So 0.09 per year is 0.025 per quarter.  So 1100 X 10^6 times 0.025 gets paid each quarter, and 4 times 15 is 60, so 60 times the quarterly amount is the total over the 15 years.


																
John
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My calculator said it, I believe it, that settles it
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