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Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to be paid at maturity. The bonds are currently selling for $690. They have 10 years remaining to maturity. The annual interest payment is 8 percent ($80). Compute the yield to maturity.

Respuesta :

Answer:

14%

Explanation:

Data provided as per the question

Face value = $1,000

Present value = $690

Nper = 10

PMT = $80

The computation of yield to maturity. is shown below:-

YTM = Rate(Nper,PMT,PV,FV)

= Rate(10,80,690,1000)

= 14%

Therefore for computing the yield to maturity we simply applied the formula and put it into an excel sheet.

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The yield to maturity is 14%

Calculation of the yield to maturity:

Since Face value = $1,000

Present value = $690

Nper = 10

PMT = $80

So, here we the rate formula to determine the yield to maturity that is shown in excel

= Rate(Nper,PMT,PV,FV)

= Rate(10,80,690,1000)

= 14%

hence, we can conclude that The yield to maturity is 14%

learn more about maturity here: https://brainly.com/question/23490950

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