Question

Andys bank issued 22year bonds 3 years ago at a coupon rate of 7.62% , the bonds make semiannual payments , if these bonds currently sell for 103 percent of par value, what is the YTM

Answer 1

	F	G
43	Yeild to maturity (19*2)	38
44	Current Value (103% * face value) = 1000*103%	1030
45	Face value	1000
46	coupon rate Semi annual (7.62%/2)	3.81%
47	coupon amount (face value* coupon rate) =3.81%*1000	$38.10
48
49
50	Rate	3.6625%

YTM for annually = 3.6625% *2 = 7.3250% or 7.33%

formula:

	F	G
43	Yeild to maturity (19*2)	38
44	Current Value (103% * face value) = 1000*103%	=1000*103%
45	Face value	1000
46	coupon rate Semi annual (7.62%/2)	=7.62%/2
47	coupon amount (face value* coupon rate) =3.81%*1000	=+G46*1000
48
49
50	Rate	=RATE(G43,G47,-G44,G45)