Question 1137046
10-year Treasury note:
Principal = p
Rate = 0.035
Time = 10
Interest = 10(0.035p) = 0.35p
<pr>
15-year bond:
Principal = p + 4000
Rate = 0.035 + 0.041 = 0.076
Time = 15
Interest = 15(0.076(p + 4000)) = 15(0.076p + 304) = 1.14p + 4560
<pr>
(0.35p) + (1.14p + 4560) = 10180
<pr>
1.49p + 4560 = 10180
<pr>
1.49p = 5620
<pr>
p = 3771.81
<pr>
10-year Treasury note:
Principal = p = $3771.81
<pr>
15-year bond:
Principal = p + 4000 = $7771.81