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 Abner​ Corporation's bonds mature in 23 years and pay 9 percent interest annually. If you purchase...

 Abner​ Corporation's bonds mature in 23 years and pay 9 percent interest annually. If you purchase the bonds for $1,125​, what is your yield to​ maturity?

Solutions

Expert Solution

The yield to maturity of the bond can be calculated with the help of RATE function of Excel

Inputs requied:

N = 23

FV = 1000

PMT= 9%/2 * 1000 = 45

PV = 1125

The Rate function is:

=RATE(23,45,-1125,1000,0,0.11)

= 3.6847%

YTM = 3.68%

jeff jeffy answered 2 years ago
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