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4. If you pay $900 for purchasing a 5.25% coupon bond, with 6 years remaining to...

4. If you pay $900 for purchasing a 5.25% coupon bond, with 6 years remaining to maturity, with par value of $1000, what would be your yield to maturity?

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Answer #1

Using financial calculator BA II Plus - Input details:

#

FV = Future Value / Face Value =

-$1,000.00

PV = Present Value =

$900.00

N = Number of years remaining x frequency = 6 x 1 =

6

PMT = Payment = Coupon / frequency = -1000 x 5.25% =

-$52.50

CPT > I/Y = Rate per period or YTM per period =

                   7.3721

Convert Yield in annual and percentage form = Yield*frequency / 100 =

7.37%
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