What would be my bond value that is 1,000 par value outstanding at 8 percent and the bond will maturer in 25 years. I need to know the present yield of maturity at 7 percent 10 percent and 13 percent.
The price of the bond is the present value of interest and principal. The annual interest is 1,000X8%=$80 and is an annuity and the present value can be found ...
The solution explains how to calculate the yield of maturity on a bond.