4.752 years (approximately 4.8 years) The bond would maturity in 4.752 years.
Applying the yield-to-maturity formula
YTM is equal to C + (fv - pv) /n (fv + pv) /2.
9.40% of the par value is the coupon rate C.
= (9.40/100)× 1000
= $94
Face value (par value) is equal to $1,000.
Price = Pv = $1,023.58
Yield to maturity is equal to 0.0880.
n = how many years before maturity?
Using the formula above;
0.0880= 94 + (1000-1023.58)/n ÷ (1000+1023.58)/2
0.0880= 94 + (-23.58)/n ÷ (2023.58)/2
0.0880= 70 + (-23.58)/n ÷ 1011.79
94 - (23.58)/n = 0.0880 × 1011.79
94 - (23.58)/n =89.03752
-23.58 / n =89.03752 - 94
-23.58 / n = -4.96248 ( Cross multiply)
-23.58 = -4.96248n
Add -4.96248 to both sides.
n = 4.752
The maturity period for the bond is 4.752 years (approximately 4.8years)
To know more about the maturity calculation visit here :
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