# Accrued Interest

**Definition:** Interest earned but not paid since the last due date.
**Definition:** [crh] Applies mainly to convertible securities. Interest that has accumulated between the most rec**Definition:** ent payment and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the sel**Definition:** ler the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the Definition: >coupon period that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and**Definition:** sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)

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