# Finance Yield to Maturity of Bonds : Compute the yield

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```					              Sub: Finance                                                Topic: Yield to Maturity of Bonds

Question:
Compute the yield to maturity on bonds
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Vertex bonds have a maturity value of \$1,000. The bonds carry a coupon rate of 14 percent.
Interest is paid semi-annually. The bonds will mature in seven years. If the current market price
is \$1,092.65, what is the yield to maturity on the bond?

Solution:

Since the coupon payment is semiannual, so n = Years to Maturity * 2

Particulars                                                                                       Amount

Number of coupon payments (n)                                                                            14

Present Value (PV)                                                                              \$1,092.65

Future Value (FV)                                                                               \$1,000.00

Interest Rate                                                                                          14%

Coupon Amount (I = 1,000 X 14% / 2)
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Description: Calculation of present value, payment, interest . : Find the simple interest on a loan of \$4,902 at 9.3 interests for 11 months.
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