Bonds pay interest on schedule, mostly once a year and once every six months, and the interest is calculated according to coupon rate. Interest payment methods include coupon method, discount method and total principal and interest method.

Selling bonds, that is, discounting, includes the interest generated during the period when you hold bonds.

Explanation:

There are three main ways to pay bond interest:

1. coupon method, also known as interest reduction method, refers to obtaining interest from the issuer on a regular basis by reducing coupon.

2. Discounted interest, that is, it is issued at a price lower than the face value of the bonds (that is, at discount), and paid at the face value of the bonds after maturity. The discounted amount is the interest of the holder.

3. Combination of principal and interest. That is, once the bond matures, the interest is paid by paying the principal and interest. It can be divided into three types:

(1) Fixed interest repays the principal and interest in one lump sum, that is, the interest is paid at the same fixed interest rate every year;

(2) repay the principal and interest step by step, that is, the bond interest rate increases year by year with the extension of the term;

(3) One-time repayment of principal and interest and compound interest calculation, that is, the interest payable each year is added to the principal of the next year to participate in the distribution and use of interest.