Find the Yield to Maturity for a bond that is currently selling at $1,090 and has the

Question:

following characteristics: (a) NPER—30 and (b) Coupon Payments--$70

Using Excel's RATE() function:

NPER...30 (This is the number of periods to maturity.)

PMT.....($70.00) (This is the coupon interest payment.)

PV.....$1,090.00 (This is the current selling price of the bond.)

FV..... ($1,000.00) (This is the par or face value of the bond .)

TYPE0. (Input 0 or 1. 0 or blank means ordinary annuity. 1 means annuity due.)

GUESS...6.00% (Input any interest here if cell C16 is returning error message.)

RATE..... 6.32% (Type formula here: = PV(rate, nipper, pmt, fv, type)

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...