# Yield to maturity on a 30 year bond

Consider a 30-year bond issued two years ago with a 9 percent coupon rate and $1,000 par value. The bond makes semi-annual payments and currently sells for $906.51. What is the bond's yield to maturity? (YTM) Why is the bond is selling at a discount?

© BrainMass Inc. brainmass.com June 3, 2020, 10:17 pm ad1c9bdddfhttps://brainmass.com/business/bond-valuation/yield-maturity-30-year-bond-224334

#### Solution Preview

** Please see the attached file for an Excel formatted copy of the solution response **

Consider a 30-year bond issued two years ago with a 9 percent coupon rate and $1,000 par value. The bond makes semi-annual payments and currently sells for $906.51.

What is the bond's yield to maturity? (YTM)

Answer: 10.00% (see calculations below)

Remaining years=30-2= 28 years

Yield to ...

#### Solution Summary

This solution shows how to calculate the yield to maturity on a 30 year bond and explains why the bond is selling at a discount.