Monica has a $1000 bond with a 5.5% coupon. Monica purchased this bond for $1025. What is the yield of this new bond?
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we can divide the composite shape into on quadrilateral and triangle as shown in the diagram. since the line that joins the two shape is parallel to the base AB, the angle DEC is 85°.The angle CEA is 180°- angle DEC = 180-85=95. Angle BCE is sum of angle CEA, ABC and EAB subtracted from360°= 360°-(95+95+85)=85°. Angle DCE is 120°- ECB=35°. So, angle CDE = 180°-(35°+85°)= 60°. For reference see the diagram.
