Assume you purchased a corporate bond at its current market price of $950 on January 1, 2005. It pays 9 percent interest, and it will mature on December 31, 2014, at which time the corporation will pay you the face value of $1,000. Assume that the bond's interest payments (590) were reinvested at a rate of 5% per annum. What would be the future value of the reinvested coupons (there are 10 years of coupons received between 2005 and 2014).
