Please show all work Yield to maturity. (a) Find the yield to maturity on a 1-month T-bill...

60.1K

Verified Solution

Question

Finance

Please show all work
Yield to maturity. (a) Find the yield tomaturity on a 1-month T-bill with $100,000 face value that sold fora price of $99,667.77.
Answer: i = 0.04
(b) Consider a loan of $400,000 to be repaid with annualpayments over 25 years. Find the fixed payments that would berequired for the yield to maturity on the loan to be 6%.
Answer: FP = $31,290.68.
(c) Consider a loan of $200,000 to be repaid with annualpayments over 30 years. If the annual fixed payments are$19,467.28, then what is the yield to maturity on the loan? Showyour work.
Answer: i = 0.09

Answer & Explanation Solved by verified expert

3.8 Ratings (602 Votes)

Calculate the yield to maturity as followsYield to maturity Face value Issue price FacevalueNumber of months in a See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Please show all workYield to maturity. (a) Find the yield tomaturity on a 1-month T-bill with $100,000 face value that sold fora price of $99,667.77.Answer: i = 0.04(b) Consider a loan of $400,000 to be repaid with annualpayments over 25 years. Find the fixed payments that would berequired for the yield to maturity on the loan to be 6%.Answer: FP = $31,290.68.(c) Consider a loan of $200,000 to be repaid with annualpayments over 30 years. If the annual fixed payments are$19,467.28, then what is the yield to maturity on the loan? Showyour work.Answer: i = 0.09