We use financial calculator to calculate ytm
Inputs: FV= 1,000,000
PV= -983,791
N = 5 months / 12 = 0.4167 years
Pmt = 0
I/y (ytm) = Compute
We get , YTM = 4%
Effective Annual rate = ( 1+ ytm/m)^m - 1
Inputs: ytm = 4%
M= 12 as it is monthly
Put it in the value
= ( 1+ 0.04/12)^12 -1
= ( 1+0.0033)^12 -1
= (1.0033)^12 -1
= 1.40742 - 1
= 0.40742 or 4.0742%
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