How do I calculate yield to maturity on a $100 bond? You can select the company of your choice.
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the purchase price of the bond is $100
we need to identify the face value of the bond which is referred to as "par value"
find the remaining years to maturity. If the bond is maturing in 2020 and we are currently in 2015, then the bond matures in 5 years time
identify the annual interest of the bond in dollars. if the annual interest rate is 10% and the par value of the bond is $100 then the annual interest is 10% x $100 or $10.
calculating yield to maturity
so the yield to maturity is 7.46%
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