ABC Company issued bonds on January 1, 2006. The bonds had a coupon rate of 5.0%, with interest paid semiannually. The face value of the bonds is $1,000 and the bonds mature on January 1, 2024. What is the yield to maturity for these bonds on January 1, 2016 if the market price of the bond on that date is $1,100?

To answer the question:

(1) Describe and interpret the assumptions related to the problem.

(2) Apply the appropriate mathematical model to solve the problem.

(3) Calculate the correct solution to the problem.