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uysha [10]
4 years ago
6

Moon lite cafe has a semiannual, 5 percent coupon bond with a current market price of $988.52. the bond has a par value of $1,00

0 and a yield to maturity of 5.68%. how many years is it until this bond matures?
Business
1 answer:
Ivenika [448]4 years ago
5 0
Mostly 18 years is it until the bond matures.Given; Semiannually, 5 percent coupon bond, market price = $988.52Solution; $988.52 = [(.05 / 2) × $1,000] × [(1 - {1 / [1 + (.0568 / 2)]t × 2}) / (.0568 / 2)] + $1,000 / [1 + (.0568 / 2)]t × 2; t = 3.6 semi-annual periods, or 1.8 years
The answer in this question is 18 years.
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