Coupon reinvestment comparison
Illustrative fixed-rate bullet bond valued just after a coupon. Coupons are kept as cash without interest or reinvested at the assumed constant nominal annual rate, compounded at the coupon frequency until maturity. The final coupon and principal are paid at maturity. Profit equals maturity value minus entered price. Same currency; no tax, fees, default, early redemption or predictions. At zero years principal is paid now.