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08-12-2020
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Consider a zero coupon bond that has a current price of $436.19 and matures in 10 years. What is its yield to maturity?

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andromache andromache

08-12-2020

Answer:

The yield to maturity is 8.65%

Explanation:

The computation of the yield to maturity is as follows:

Given that

Future value = $1,000

Present value = $436.19

NPER = 10 years

PMT = $0

The formula is shown below:

=RATE(NPER;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the yield to maturity is 8.65%

Hence, the yield to maturity is 8.65%

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