Investments
Analysis of performance
Bond performance
The interest of the government bond is calculated and paid quarterly. To establish what the quarterly interest rate is, you divide the interest rate of 4% by 4, which is 1.0%. This is paid each quarter and is not reinvested in the bond.
Quarter 1 100,000 x 1.0% = $1,000
Quarter 2 100,000 x 1.0% = $1,000
Quarter 3 100,000 x 1.0% = $1,000
Quarter 4 100,000 x 1.0% = $1,000
Total Interest $4,000
The total return is $4,000 in interest on your $100,000.
To express this as a percentage it is $4,000 divided by $100,000. The return for the government bond is 4% (0.04).
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