What is the yield-to-maturity (or rate of return) on a 15-year, zero coupon bond selling for $385? The face value is $1000. Note: The bond has only one cash flow equal to $1000 and it occurs 15 years from today.
Information provided:
Face value= future value= $1,000
Time= 15 years
Present value= $385
The yield to maturity is calculated by entering the below in a financial calculator:
FV= 1,000
PV= -385
N= 15
Press the CPT key and I/Y to compute the yield to maturity.
The value obtained is 6.57.
Therefore, the yield to maturity is 6.57%.
In case of any query, kindly comment on the solution.
What is the yield-to-maturity (or rate of return) on a 15-year, zero coupon bond selling for...