Treasury bond calculation

Question

I have a $1500.00 Treasury bond with a current yield of 2.7% that is quoted at 113.7 points. I need to Compute the annual intrest. What is the equation and what do the points mean?

Answer 1

Current yield is coupon/price

coupon=price*current yield=113.7*.027=3.0699percent

Normally treasury bonds don't have coupons to four decimal places. I will use 3.07 percent as the coupon rate

The yearly interest is 1500*.0307=55.5 dollars

points are percent