Question

Excey Corp. has 9 percent coupon bonds making annual payments with a YTM of 8.3 percent. The current yield on these bonds is 8.65 percent. How many years do these bonds have left until they mature? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

8.19 years

Step-by-step explanation:

In this question we use the NPER formula that is shown in the attachment below:

Given that,

Present value = $90 ÷ 8.65% = $1,040.46

Assume the Future value = $1,000

Rate of interest = 8.30%

PMT = $1,000 × 9% = $90

The formula is shown below:

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

The present value come in negative

So, after solving this, the number of years is 8.19 years