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