Question $4(3$ points$)$

Consider a $35-$year coupon bond with a face value of $$1,000$ that pays $$80$ annual coupons $($beginning one

year from today$).$ Assume that you invest each coupon in a bank that pays $8\%$ interest. By the maturity date:

A$)$ Calculate the future value of coupons reinvested at $8\%($Use all decimals on your calculations and

include your answer with $2$ decimals. Do not include symbols or comma separators eg$.$ Assume the correct

answer is $$1,289\mathrm{.}54632,$ so input your answer as $1289\mathrm{.}55)$

A

B$)$ How much interest is earned for reinvesting the coupons? $($Use all decimals in your calculations and

include your answer with $2$ decimals. Do not include symbols or comma separators eg$.$ Assume the correct

answer is $$1,289\mathrm{.}54632,$ so input your answer as $1289\mathrm{.}55)$

A$.$

C$)$ Calculate the interest earned for reinvesting coupons, as a proportion of all money received for

owning the bond until maturity. $($Use all decimals in your calculations and include your answer in

percentual form with $2$ decimals. Do not include symbols or comma separators eg$.$ Assume the correct

answer is $12\mathrm{.}68741\%,$ so input your answer as $12\mathrm{.}69)$