A 25 Percent TIPS Has an Original Reference CPI of 170

A 2.5 percent TIPS has an original reference CPI of 170.4. If the current CPI is 205.7, what is the current interest payment and par value of the TIPS? (Assume semiannual interest payments and $1,000 par value.)

A) $1,000, $7.16, respectively
B) $1,000, $15.09, respectively
C) $1,207.16, $7.16, respectively
D) $1,207.16, $15.09, respectively

Correct Answer:

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