Consider a coupon bond that has a par value of ​$900 and a coupon rate of 10%

Consider a coupon bond that has a par value of ​$900 and a coupon rate of 10%. The bond is currently selling for ​$940.40 and has 2 years to maturity. What is the​ bond’s yield to maturity​ (YTM)?
Hence, the bond’s yield to maturity = 7.50%

Step-by-step explanation
We can calculate the yield to maturity by using the following formula in excel:-

=rate(nper,pmt,-pv,fv)

Here,

Rate = Yield to maturity

Nper = 2 periods

Pmt = Coupon payment = $900*10% = $90

PV = $940.40

FV = $900

Substituting the values in formula:

= rate(2,90,-940.40,900)

= 7.50%

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