Hi all, I am having trouble understanding how to solve the below question using a financial calculator as shown in my review notes.
Jane Walker has set a 7% yield as the goal for the bond portion of her portfolio. To achieve this goal, she has purchased a 7%, 15-year corporate bond at a discount price of 93.50. What amount of reinvestment income will she need to earn over this 15-year period to achieve a compound return of 7% on a semiannual basis?
The given explanation for this answer is:
935(1.035)30 = $2,624
Bond coupons: 30 × 35 = $1,050
Principal repayment: $1,000
2,624 − 1,000 − 1050 = $574 required reinvestment income
After thinking about this method, it makes sense to me, but can someone show me how it could also be solved using a financial calculator to find the FV of the reinvested coupon payments? I can’t seem to get this same answer using the calculator, so I don’t know what I am doing wrong.