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A bond that has a face value of $150 maturing in one year is available for purchase for $134 . What is the interest rate offered on the bond

Sagot :

The interest rate offered on the bond is 11.94%.

What is the interest rate on the bond?

The interest rate of the bond can be determined by calculating the yield to maturity of the bond. The yield to maturity is the interest rate that equates the price of the bond to the future value of the bond.

The yield to maturity can be determined using a financial calculator:

  • Cash flow in year 0 = $-134
  • Cash flow in year 1 = $150

YTM = 11.94%

To learn more about yield to maturity, please check: https://brainly.com/question/26376004

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