Question

Redesigned Computers has 6.2 percent coupon bonds outstanding with a current market price of $604. The yield to maturity is 14.4 percent and the face value is $1,000. Interest is paid annually. How many years is it until these bonds mature

Answer 1

These bonds mature in 8 years

Step-by-step explanation:

We are required to find the Number of Years that the Bonds will mature. Thus we want to find N

Using A financial Calculator

PV = $604

YTM = 14.4 %

PMT = $1,000 × 6.2 % = 62

FV = $ 1000

P/YR = 1

N = ?

N = 8.837

Therefore these bonds mature in 8 years