A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places. What is the yield to maturity if the bond is selling for $900? What is the yield to maturity if the bond is selling for $1,000? What is the yield to maturity if the bond is selling for $1,100?
A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%.
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.
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What is the yield to maturity if the bond is selling for $900?
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What is the yield to maturity if the bond is selling for $1,000?
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What is the yield to maturity if the bond is selling for $1,100?
Face Value (FV)= $1000
Coupon Value(C) = $1000*8%
= $80/2
= $40
Time(n) = 30yrs
Number of compounding = 2
Nper = time(n) x number of compounding
= 2 x30=60
Bond Price(BP)=$900
Computation of yield to maturity
= RATE(Nper, C, - BP, FV, 0, 0) *Number of compounding
= RATE(60, 40, -900,0,0)*2
= 8.970%
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