Question

Redesigned Computers has 6.5 percent coupon bonds outstanding with a current market price of $769. The yield to maturity is 13.2 percent and the face value is $1,000. Interest is paid annually. How many years is it until these bonds mature?A. 5.73 years B. 7.41 years C. 6.16 years D. 4.19 years

Answer 1

4.90 years

Step-by-step explanation:

We have to applied the NPER formula that is presented on the attachment.

The NPER reflects the time period.

Given that,

Present value = $769

Future value = $1,000

Rate of interest = 13.2%

PMT = $1,000 × 6.5% = $65

The formula is shown below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

After solving this, the nper is 4.90 years

Note: This is the right answer which is not given in the mentioned options.