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World Travel has 7 percent, semiannual, coupon bonds outstanding with a current market price of $1,023.46, a par value of $1,000, and a yield to maturity of 6.72 percent. How many years is it until these bonds mature?
A.) 12.26 years
B.) 12.53 years
C.) 18.49 years
D.) 24.37 years
E.) 25.05 years

Respuesta :

Answer:

B.) 12.53 years

Explanation:

In this question, we use the NPER formula which is shown in the spreadsheet.  

The NPER represents the time period. inv

Given that,  

Present value = $1,023.46

Future value = $1,000

PMT = $1,000  × 7% ÷ 2 = $35

Rate of interest = 6.72% ÷ 2 =3.36%

The formula is shown below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

So, after solving this, the answer would be 12.53 years

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