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Builtrite currently has a $1000 par, 9 year maturity, zero coupon bond outstanding that is selling for $645. What is the bonds yield to maturity?

User Valkirilov
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1 Answer

1 vote

Answer:

the bonds yield to maturity is 5%

Step-by-step explanation:

The computation of the yield to maturity of the bond is shown below:

Given that

Future value = Par value = $1,000

NPER = 9 years

Present value = $645

PMT = $0

The formula is shown below:

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

After applying the above formula, the yield to maturity is 5%

Hence, the bonds yield to maturity is 5%

The same is to be considered

Builtrite currently has a $1000 par, 9 year maturity, zero coupon bond outstanding-example-1
User Ardit Hyka
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