Question

Beam Inc. bonds are trading today for a price of $1,229.17. The bond pays annual coupons with a coupon rate of 85% and the next coupon is due in one year. The band has a yield to maturity of 6 27% How many years are there until the bond matures? The number of years until the bond matures is years Round to the nearest whole number )

Answer 1

The number of years until the bond matures is computed as follows:

Simply plug these numbers in the financial calculator as shown below:

PV = - 1,229.17

FV = 1,000

PMT = 8.5% x 1,000

= 85

I/Y = 6.27

and press CPT N, which will give n equal to 17 years approximately

So the number of years until the bond matures is 17 years

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