Question:

AAPL has two annual coupon bonds outstanding that are selling at par. One bond is a 4% coupon rate bond with a year left to maturity (the only coupon payment left is the one at maturity), and another bond is a two year 6% coupon rate bond. What is the forward rate for AAPL after the present year?

Answer:

The answer to this question is 8.16% calculated using the forward rate formula with yields for bond 1, y1 = 4% and yield for bond 2, y2 = 6.06%.

HELP:

I understand that a two year coupon bond would theoretically have a higher yield due since the bond was issued at par, and would now have a yield to reflect the change in price since issuance. Yet, I am confused mathematically how to calculate the yield on the 2Y bond to be 6.06%.