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Footsteps Co. has a bond outstanding with a coupon rate of 5.7 percent and annual payments. The bond currently sells for $992.35, matures in 21 years, and has a par value of $1,000. What is the YTM of the bond

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Answer:

5.76%

Explanation:

For this question we use the RATE formula that is shown on the attachment

Kindly find the attachment below

Provided that

Present value = $992.35

Future value or Face value = $1,000  

PMT = 1,000 × 5.7% = $57

NPER = 21 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the yield to maturity is 5.76%

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