YTM reinvested

Sheet1

Base case: $94.17 buys an 8-year CD @ 8%
CD @
100
rate
5%
Total future dollars
148.45
Dollar return
48.45
Compare to bond purchase 
Bond @
1000
Face
1000
coupon
5.0%
Coupons reinvested @
8%
Periods
Reinvested
Coupon
Period (semiannual)
1
19
25
27.67
2
18
25
25.65
3
17
25
23.70
4
16
25
21.82
5
15
25
20.02
6
14
25
18.29
7
13
25
16.63
8
12
25
15.03
9
11
25
13.49
10
10
25
12.01
11
9
25
10.58
12
8
25
9.21
13
7
25
7.90
14
6
25
6.63
15
5
25
5.42
16
4
25
4.25
17
3
25
3.12
18
2
25
2.04
19
1
25
1.00
20
0
25
0.00
Total Coupon
500
244.45
Case: if coupons are not reinvested: outcome = dollar return shortfall
Coupon interest
500
Capital gain
0
Dollar return
500
Case: coupons reinvested @ 5%: outcome = dollar return equivalence
Coupon interest
500
Capital gain
0
Reinvestment
244.45
Dollar return
744.45
100
4.09
1
4.09
9590
104.09
0.01085401459854

Sheet2

Sheet3