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    Sure Tea Co. has issued 9% annual coupon bonds which are now selling at a yield to maturity of 10 percent and current yield of 9.8375%. What is the remaining maturity of these bonds?

    Use the NPER function to calculate the number of years till maturity.

    Face value of bond $1,000
    Annual coupon rate 9%
    Current yield 9.8375%
    Yield to maturity 10%

    Current price per bond FORMULA
    Years till maturity FORMULA.

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    Solution Preview

    (a) Current Price Per Bond

    Current Yield = Annual Payment / Price Paid
    =>0.098375 = 0.09*1000 / Price Paid
    => Price Paid = 90/0.098375
    => Price Paid = 914.87

    Thus the current ...

    Solution Summary

    The solution uses Excel formulas to solve present value problems. Specifically, the problem is solving for the number of periods.