This is a repost of this problem because my answer contradicts part b rate of return that another person answered when i posted last. One person here gave me the answer 15.96 with an explanation of :

Rate of Return = (1,040 - 940 + 50)/940

Rate of Return = 15.96%

But I got the answer of 11.70% by

Rate of return = RATE(NPER,PMT,-PV,FV) = RATE(1,50,-940,1000) = 11.70%

Could you let me know which one is right and why. Thank you

You buy a(n) 5% coupon, 5-year maturity bond for $940. A year later, the bond price is $1,040. Assume coupons are paid once a year and the face value is $1,000. a. What is the new yield to maturity on the bond (one year from now)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity 3.90% b. What is your bond's rate of return over the year? (Round your answer to 2 decimal places.) Rate of return 11.70 %