Let us consider a bond paying semiannual coupons with \(6 \%\) coupon rate on a face value of \(\$ 1000\), which means that the bond pays \(\$ 30\)

every six months. Let us ignore day count issues, for the sake of simplicity, and assume that the last coupon was paid two months ago. Accrued interest is obtained by prorating the next coupon as follows:

If yield is lower than the coupon rate, the bond shall trade at premium, say, at a quoted price of 112.08 . Thus, the cash price would be 

     Clean price + Accrued interest =

In practice, this calculation should be carried out according to the relevant day count convention pertaining to the specific bond at hand.

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2 $30 x $10. 6