If you have a 3 year $1000 bond with 10% annual coupon payments, what is the...

If you have a 3 year $1000 bond with 10% annual coupon payments, what is the yield to maturity? The bond has a present value of $1,153. What am I solving for? N? I/YR, PV? FV?

Solutions

Expert Solution

You are solving for I/Y

Yield to maturity is I/Y

Annual coupon = 10% of 1000 = 100

Yield to maturity = 4.44%

Keys to use in a financial calculator:

FV 1000

PV -1153

PMT 100

N 3

CPT I/Y

jeff jeffy answered 2 years ago

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