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Problem regarding the interest-on-interest

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1. Interest-on-Interest Consider a $2,600 deposit earning 7 percent interest per year for 6 years. How much total interest is earned on the original deposit (excluding interest earned on interest)?

2. TIPS Capital Return Consider a 3.75% TIPS with an issue CPI reference of 188.20. At the beginning of this year, the CPI was 199.00 and was at 205.40 at the end of the year. What was the capital gain of the TIPS in dollars? (Round your answer to 2 decimal places.)

3. TIPS Interest and Par Value A 3.75 percent TIPS has an original reference CPI of 176.80. If the current CPI is 208.70, what is the current interest payment and par value of the TIPS? (Round your answers to 2 decimal places.)

Reference no: EM131190227

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