How is the interest on a bond calulated?

The interest on a bond, often referred to as the coupon payment, is calculated by multiplying the bond's face value (or par value) by the coupon rate. For example, if a bond has a face value of $1,000 and a coupon rate of 5%, the annual interest payment would be $50. This payment is typically made semiannually, annually, or at other specified intervals, depending on the bond's terms. The interest calculation does not change over the life of the bond, unless it is a variable rate bond.