If a bank pays 12% interest,and that bond has a selling price of $1,200 and a face value of $1,000,how much interest does it pay?

Interest Rate

The ratio of a loan that represents interest expenses to the borrower, typically articulated as an annual percentage of the loan yet to be repaid.

Selling Price

The price at which an item or service is sold to buyers.

Face Value

The nominal or stated value of a security or coin, as printed or stamped on the face of it, and not necessarily its market value.