And Interest

DEFINITION of 'And Interest'

A slang phrase used when quoting the price of a fixed-income instrument with accruing interest. When revealing the sale price of a bond, a broker or salesman will often express the value as the clean price "and interest".

Also written as "and-interest".

BREAKING DOWN 'And Interest'

For example, let's examine a bond, selling at par, paying an annual coupon of $8, with a par value of $100. It has been exactly half a year since the bond last paid a coupon. If you wish to purchase this bond, the likely quote you will hear is "$100 and interest". The $100 represents the clean price of the bond. The "and interest" is equal to the accrued interest at the time of sale. Since the bond pays a coupon once a year, and half a year has passed, the "and interest" equals $4 ((1/2) x 8).

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