FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
For this question, the inflation rates are actual inflation levels ( so a 6-month inflation rate increase of 3% increases par by 3%, not 1.5%.)
You have a semiannual treasury inflation protected security, which is 1000 par and sells at par, with a 4% coupon rate. If the inflation rates are: 2% for the first 6 months and then 0.4% for the second, 1% for the third and 0% for the fourth 6 months, find:
-the individual nominal payments made for each time period
Report the total amount paid including par (all coupons and par, total dollar value) (do not use $ in the answer)
Note: Correct answer is 1,116.5752. Please explain and show step by step?
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