How to calculate a bond coupon rate
Because most coupon rates are fixed, rather than being pegged to an index like the London Inter-Bank Offered Rate (LIBOR), they're pretty easy to calculate. Using the $1,000 bond mentioned above, you can easily calculate the coupon rate of 2.5% by dividing the annual coupon payment by the face value of the bond; $25 divided by $1,000 is 2.5%.
Sometimes, you have bonds that pay more frequently than annually, which can be a little confusing at first. Let's say that the same bond pays quarterly rather than annually. So instead of getting $25 once a year, you get $25 four times a year. Simply multiply $25 by 4, which gives you $100 in annual payments for your $1,000 bond. Dividing $100 by $1,000 gives you a 10% coupon rate (which, frankly, would be remarkable).