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mario62 [17]
3 years ago
6

John buys a $1,000 bond that pays 6% annual interest at 75. what is john's annual yield?

Business
1 answer:
lina2011 [118]3 years ago
5 0

To calculate the current yield of bonds.

We have the given par value of $1000, a market price of $750 and an interest rate of 6%.

Formula of current yield: 

Yield =  (interest rate * par value)/(market price) * 100%

         =  ((0.06 *  $1000)/$750) * 100%

         = ( $60/$750) * 100%

         =0.08 * 100%

         = 8%


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