Assuming a face value (F) of $1000, we are given the following data:

present value or bond value, b = $1125.25

Rate of return = 6.55%

Coupon payment, C = 1000 x6.55% = $65.5

Time to maturity, t = 19 years

Number of intervals (given semi-annual interest payments) = 38

Using the equation for bond price,

bond price = (C/2) (1-[(1+YTM/2)^(-2t)])/(YTM/2) + F/[(1+(YTM/2)^t]

we can calculate the yield to maturity (YTM) as **5.48%**.

You can also use a helpful link at http://www.investopedia.com/ask/answers/012015/how-do-i-calculate-yield-maturity-excel.asp to calculate the same using an easy excel function.

hope this helps.

**Further Reading**

## We’ll help your grades soar

Start your 48-hour free trial and unlock all the summaries, Q&A, and analyses you need to get better grades now.

- 30,000+ book summaries
- 20% study tools discount
- Ad-free content
- PDF downloads
- 300,000+ answers
- 5-star customer support

Already a member? Log in here.

Are you a teacher? Sign up now