Question

The Timberlake-Jackson Wardrobe Co. has 10.8 percent coupon bonds on the market with eight years left to maturity. The bonds make annual payments and have a par value of $1,000. If the bonds currently sell for $1,129.70, what is the YTM?

Answer 1

the yield to maturity is 8.50%

Step-by-step explanation:

The computation of the yield to maturity is shown below:

Given that

Future value = $1,000

Present value = $1,129.70

PMT = $1,000 × 10.8% = $108

NPER = 8

The formula is shown below:

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

The present value comes in negative

After applying the above formula, the yield to maturity is 8.50%

Hence, the yield to maturity is 8.50%