The yearly return of the investor is given to be 11.069%
<h3>How to find the YTM</h3>
In order to do this we have to make use of the Rate function in excel
This would be given as
=RATE(nper, PMT, PV, FV)
where Nper is 5 years
PMT is = $1,000*10% = $100
PV = $980
The future value Fv is given as $1,000
Hnece we would have to type in excel
RATE(5,100,-980,1000)
This would give us the value of the YTM as 10.5348%
Next would be to find the rate of return of this investor. This would be the rate that he actually earned.
We would also use the rate function
=RATE(nper, PMT, PV, FV
Npe = 4 years
PMT = $1,000*10% = $100
PV = $980
FV = $1,020 that is the amount for which the bond was sold
=RATE(4,100,-980,1020)
The solution would be = 11.0698%
Thus we can say that the return earned on investment is 11.0698%
Read more on YTM here
brainly.com/question/26376004
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