Question $7$

The U$.$S$.$ Government $14\%$ coupon bond has $12$ years remaining to maturity. The

bond pays annual coupons and the next coupon is due in one year. The face

value of the bond is $$100.$ The bond is currently trading for $$112\mathrm{.}39$ and yields

$12\%.$ If you buy the bond today and hold to maturity, then how much interest do

you earn on reinvested coupons $($assuming coupons reinvested at the yield rate$)?$

In other words, if you invest the coupons in a bank that pays $12\%$ per year, then

how much interest do you earn just from investing the coupons?

How much interest do you earn on reinvested coupons? $$,($Round to two

decimal places.$)$