2. Bond. What is the yield to maturity of a $1000 par value bond with an a. 10% annual coupon and 10 years to maturity and a $1,000 price?

Bond maturity is the date that the bond is repaid to the investor. This can be from one day to 30-100 years.

You can buy a bond through a full service or discount brokerage. You can go to a bond broker (large initial deposit) or a bond fund.

You are considering buying bonds in ACBB, Inc. The bonds have a par value of $1,000 and
mature in 37 years. The annual coupon rate is 10.0% and the coupon payments are annual. If
you believe that the appropriate discount rate for the bonds is 13.0%, what is the value of the
bonds to you? (Hint: Bond value - annual pmts)

You are considering buying bonds in ACBB, Inc. The bonds have a par value of $1,000 and
mature in 37 years. The annual coupon rate is 10.0% and the coupon payments are annual. If
you believe that the appropriate discount rate for the bonds is 13.0%, what is the value of the
bonds to you? (Hint: Bond value - annual pmts)

The future value would be $2604.30, so the yield to maturity would be $1,604.30

This calculation is based on 7.5% interest compounded twice per year (semiannually)

Hope this helps!

Look Honey.... We are not your Teacher Here...But we will be glad to answer your problem about your Calculator ...Good Luck

You are considering buying bonds in ACBB, Inc. The bonds have a par value of $1,000 and
mature in 37 years. The annual coupon rate is 10.0% and the coupon payments are annual. If
you believe that the appropriate discount rate for the bonds is 13.0%, what is the value of the
bonds to you? (Hint: Bond value - annual pmts)

I'm going to make up an example so this is easier to answer.

Ex: You have a bond with a price of $987, with a coupon of 1.5%, which matures in 10 years.
To do this problem:

[APPS] [1] [1]

What comes up on screen:

N=
I%=
PV=
PMT=
FV=
This is all the stuff that you really care about.

Now, add in the info you know from the equation. Put in a 0 if you don't know the number for that part.

This is what it should look like:
N=10
I%=0
PV=-987
PMT=15
FV=1000

Now, cursor back up to the I%=0 part.
Highlight the '0' that you had in there from before.
[ALPHA] [ENTER] ----> notice above the enter button it says in green lettering "solve", this is what you are trying to do.

Yay! Your caluculator has now figured out the interest rate!
it should say:
I%=1.642027191



Notes:
1. Make sure your payment is set at the end of the period (this is just the standard so you probably don't want to mess with it.) Scroll down to the PMT: END BEGIN part and make sure the END is highlighted.

2. This example used annual coupon payments. The p/y and c/y business is used for when you have semi-annual payments or semi-annual compounding (or daily, or hourly etc). You can use this feature, or you can just adjust the payment and periods
(ie: if this were a semi-annual coupon bond, the N would be 20 and the pmt would be 7.5)