Answer:
YTM 5.94%
Explanation:
The yield to maturity is the rate at which the present value of the bonds coupon payment and maturity matches the current bond price:
The coupon payment is an ordinary annuity
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
Coupon payment: 4,400 (100,000Y x 4.4%)
time 15 years
rate 0.059382123
[tex]4400 \times \frac{1-(1+0.0593821234851146)^{-15} }{0.0593821234851146} = PV\\[/tex]
PV 42,906.9498Y
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 100,000.00Y
time 15.00
rate 0.059382123
[tex]\frac{100000}{(1 + 0.0593821234851146)^{15} } = PV[/tex]
PV 42,093.05Y
PV c 42,906.9498Y
PV m 42,093.0502Y
Total 85,000Y
This is done with excel using goal seek tool or with a financial calculator.
