A corporate bond pays interest on January 1st and July 1st. If the bond is purchased on May 31st, how many days of accrued interest will the buyer pay the seller?

To determine the number of days of accrued interest the buyer pays the seller when purchasing a corporate bond that pays interest semiannually, it's essential to calculate the time from the last interest payment date up to the purchase date.

The bond pays interest on January 1st and July 1st. If the bond is purchased on May 31st, the last interest payment occurred on January 1st and will occur again on July 1st.

The interval between interest payments is 182 days (from January 1 to July 1). The buyer is purchasing the bond just one day before the semiannual interest date on July 1. Therefore, the accrued interest will include the period from the last payment date (January 1) up to the purchase date (May 31).

Calculating the total number of days from January 1 to May 31:

• January has 31 days, leading to 30 days from January 1 to January 31.

• February has 28 days in a non-leap year, accumulating 28 days.

• March has 31 days.

• April has 30 days.

• May has 31 days up to May 31.

Adding these days together gives:

30 (January)