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Homework answers / question archive / (Yield to? maturity) Abner? Corporation's bonds mature in 18 years and pay 14 percent interest annually
(Yield to? maturity) Abner? Corporation's bonds mature in 18 years and pay 14 percent interest annually. If you purchase the bonds for ?$950?, what is your yield to? maturity?
Your yield to maturity on the Abner bonds is ?(Round to two decimal? places.)
Computation of Yield to Maturity using Rate Function in Excel:
=rate(nper,pmt,-pv,fv)
Here,
Rate = Yield to Maturity = ?
Nper = 18 years
PMT = $1,000*14% = $140
PV = $950
FV = $1,000
Substituting the values in formula:
=rate(18,140,-950,1000)
Rate or Yield to Maturity = 14.81%
