Need business and finance help: How do I calculate yield to maturity on a 100 bond?

timer Asked: Nov 15th, 2015
account_balance_wallet $5

Question Description

How do I calculate,yield to maturity on a 100 bond this can be the company of your choose.

Tutor Answer

School: University of Virginia

Thank you for the opportunity to help you with your question!

(yield to maturity) YTM = P/ (1 + (r/k) )^(kt)     where P = principal,  r = annual interest rate,  k = # of payments per year.  t = how long the bond takes to mature.

if you say a $100 bond, then.  YTM = 100 / (1 + r)^t    

So if you have a 30 year zero coupon bond with $100, at 10% annual YTM, then YTM = 100/(1.1)^30 = 5.73

Please let me know if you need any clarification. I'm always happy to answer your questions.

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