Reading 58 // Quickly Way to Calculate Reinvestment Income For Several Years?

CFA Level I
#1

Hello,

The formula to calculate Reinvestment Income for year 1 is :

RI = coupon interest*(1+r)^(n-1)

If I want to calculate the reinvestment income for several years, I need to calculate each year and then summing all years but it takes a lot of time if we have 10 years for instance.

Do you know, by any chance, a quick way to calculate the reinvestment income for the whole 10 years in one calculation?

Thanks !

#2

Error in the formula, this is the correct formula :

RI = coupon interest*(1+r)^(n-1) - coupon interest

#3

Do it through Future Annuity formula.

RI = CP x { [( 1 + i )^n -1] / i } - Capital Gain - Coupon Payments

#4

Thanks a lot ! I will try it tonight !

#5

Oh yes !! No capital gains… Thanks !!