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28 March, 02:32

Redesigned Computers has 6.2 percent coupon bonds outstanding with a current market price of $604. The yield to maturity is 14.4 percent and the face value is $1,000. Interest is paid annually. How many years is it until these bonds mature

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  1. 28 March, 02:44
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    These bonds mature in 8 years

    Explanation:

    We are required to find the Number of Years that the Bonds will mature. Thus we want to find N

    Using A financial Calculator

    PV = $604

    YTM = 14.4 %

    PMT = $1,000 * 6.2 % = 62

    FV = $ 1000

    P/YR = 1

    N = ?

    N = 8.837

    Therefore these bonds mature in 8 years
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