17.39 years it will take until these bonds mature.
Market price=Face value/(1+YTM/2)^(2*time period)
318.46=1000/(1+0.0669/2)^(2*time period)
(1.03345)^(2*time period)=(1000/318.46)
Taking log on both sides;
2*time period*log (1.03345)=log (1000/318.46)
time period=1/2[log (1000/318.46)/log(1.03345)]
= 17.39 years(Approx).
A bond is debt protection, just like an IOU. borrowers issue bonds to elevate money from buyers inclined to lend them cash for a certain time. When you purchase a bond, you are lending to the issuer, which can be a government, municipality, or enterprise.
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