Calculate the Yield to Maturity for a bond that has: a face value of $100, a...

Question

Question

Calculate the Yield to Maturity for a bond that has:

a face value of $100, a current price of $90, a coupon rate of 3.5% paid annually, and the bond matures in six years.

Answer 1

Answer #1

Using, the following function in Excel.

rate RATE(nper, pmt, pv, [fv], [type], [guess))

where, nper = 6

pmt = 3.5% of 100 = 3.5

pmt = -90

fv = 100

=RATE(6,3.5,-90,100)

=5.50%

Answer 2

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