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Consider a zero-coupon bond with a $1000 face value and 15 years left until maturity. If the bond is currently trading for $431, then the yield to maturity on this bond is closest to __
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Consider a zero-coupon bond with a $1000 face value and 15 years left until maturity. If the bond is currently trading for $431, then the yield to maturity on this bond is closest to __

User Koloritnij
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1 Answer

2 votes

Answer:

the yield to maturity is 5.77%

Step-by-step explanation:

The computation of the yield to maturity is shown below:

Given that

FV = $1,000

PV = $431

PMT = $0

NPER = 15

The formula is shown below:

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

After applying the above formula, the rate of interest is 5.77%

Hence, the yield to maturity is 5.77%

User Mehul Mali
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