The $1,000 face value bonds of Jasper International have a 7.5 percent coupon and pay interest annually. Currently, the bonds ar
e quoted at 98.27 and mature in 3.5 years. What is the yield to maturity?
1 answer:
Answer:
8.09%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,000 × 98.27% = $982.70
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 7.5% = $75
NPER = 3.5 years
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
The present value come in negative
So, after solving this, the answer would be 8.09%
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5.37%
Explanation:
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=
= 0.053658 or 5.37%
The cousin loaned $420 to Becka
she would expect Becka to pay back 420 x (1 + 5.37%) which is equal to $442.554
The real return on the loan = × 100 = 5.37%