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Nastasia [14]
3 years ago
7

Excey Corp. has 8 percent coupon bonds making annual payments with a YTM of 7.2 percent. The current yield on these bonds is 7.5

5 percent. How many years do these bonds have left until they mature?

Business
1 answer:
xeze [42]3 years ago
7 0

Answer:

11.057 years

Explanation:

For computing the number of years we need to apply the NPER formula i.e to be represented in the attachment below:

Given that,  

Present value = $1,000 × 8% ÷ 7.55% = $1,059.60

Assuming Future value = $1,000

Rate of interest = 7.2%

PMT = $1,000 × 8% = $80

The formula is shown below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

So, after applying the above formula, the number of years is 11.057 years

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