The stated interest rate of a bond payable is also known as the face interest rate, the nominal interest rate, the contractual interest rate, and the coupon interest rate.
Generally, a bond's stated interest rate is fixed (remains constant) for the life of the bond. As a result a bond's interest payments form an ordinary annuity for the life of the bond. On the other hand, the market interest rate for the bond will likely change often. A change in the market interest rate will cause the present value of the interest payments (and the present value of the maturity amount) to change in the opposite direction. For instance, when the market interest rate increases the present value of an existing bond will decrease.
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