Scott turner has a bond with 10 years to maturity, a face value of $1,000, an 8% interest rate, and a market price of $800. what is the yield-to-maturity on this bond?

The yield to maturity, YTM, is the total return you could get from the bond if you keep the bond until it matures.

To solve:

Yield to maturity = { ($1,000 x 0.08) + [ ($1,000 - $800/10]}/[ ($800 + $1,000) / 2]

Yield to maturity = 11.11%