Coupon rate is the yearly interest earned by a loan and it can be calculated with
[tex] C = \frac{i}{p} [/tex]
where i is the annual interest and p is the par value of the bond or the initial loan amount.
For this particular case, since the semiannual payment is $28.50, then the annual payment is 2 x 28.50 = $57.00.
Thus, we have
[tex] C = \frac{57}{1000} = 0.057 [/tex]
From this, the coupon rate is 0.057 x 100% = 5.7%.
Answer: 5.7%
