A government loan and its yield to maturity come less than 12% for the student to pay for a college fee. The yield to maturity is the amount earned as an annual average on the bond. When a 12% rate is decided, the discounted value at present will be less than the $1,000 loan amount. It will not be paid for 2 years of graduation. When the amount is payable in the future, the yield to maturity lowers by 12% for the present situation as discounted value to the student.