The Lo Sun Corporation offers a 6.2 percent bond with a current market price of
ID: 2653075 • Letter: T
Question
The Lo Sun Corporation offers a 6.2 percent bond with a current market price of $774.50. The yield to maturity is 8.46 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
The Lo Sun Corporation offers a 6.2 percent bond with a current market price of $774.50. The yield to maturity is 8.46 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
22.43 years 44.86 years 24.98 years 43.04 years 11.22 yearsExplanation / Answer
The Lo Sun Corporation offers a 6.2 percent bond with a current market price of $774.50. The yield to maturity is 8.46 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
No of year left to mature = nper(rate,pmt,pv,fv)/2
PV (indicates the price) = 774.50
PMT (indicate the Semi annual payment) = 1000*6.2%*1/2 = 31
FV (indicates the face value) = 1000
Rate (indicates YTM) = 8.46%*1/2 = 4.23%
No of year left to mature = nper(4.23%,31,-774.50,1000)/2
No of year left to mature = 22.43 Years
Answer
A) 22.43 years
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