The Arnold National Bank has a bond portfolio that consists of bonds with 5 years to maturity and a 9% coupon rate. These bonds
are selling in the market for $1126. Coupon payments are made annually on this bond. What is the yield to maturity on these bonds?
1 answer:
Answer:
6.01%
Explanation:
We use the RATE formula to determine the yield to maturity that is shown in the attachment
Given that,
Present value = $1,126
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 9% = $90
NPER = 5 years
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
The present value come in negative
Therefore, the yield to maturity is 6.01%
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Answer:
See attached file
Explanation:
Accounting Equation Formula:
Assets = Liabilities + Stockholders' Equity
The equation shows that Assets are increased by Debits and decreased by Credits, instead, Liabilities and Stockholders´ Equity decreased by Debits and increased by Credits. In the file, Debits and Credits are represented by the word increased and decreased according to if the transaction has a positive or negative effect on each element.
