A mortgage bond issued by Automation Engineering is for sa 1

A mortgage bond issued by Automation Engineering is for sa 11% per year, payable quarterly what rate of return w ill be realized if the purchaser holds the bond to maturity 6 years from now? The rate of return will be[--1G % per year.

Solution

use financial calculator in this case

PV=-8200 is the present value of the bond

FV=10000 is the par and maturity value of the bond

N=6*4=24 quarterly periods

PMT=10000*11%/4=275 income per quarterly

Click CPT

Click I/Y=3.9210% per quarterly

rate of return=3.9210% *4=15.68%

the above is answer..