Would you rather lend money at an interest rate of 10 percent when you expect inflation of 7 percent or at an interest rate of 5 percent when you expect inflation of 1 percent? AP 14. No one is willing to loan money at a negative nominal interest rate. Why lend $1,000 today in return for less than that in a year, when you could just keep the money in your pocket and have the full $1,000 next year? So Why, then, would anyone pay more than the face value for a coupon bond, for example, why pay $1,050 for a coupon bond with a face value of $1,000?