Problem: You are considering buying a 30 year bond issued by Microsoft for $95.00. The bond has a par value of $100 and pays a coupon of 7.5% annually.
If you reinvest all your coupon payment at the yield to maturity on the bond, what will be the value of your investment in 30 years?
- $325.00
- $615.33
- $840.33
- $940.33