What is the yield to maturity on the following bonds; all have a maturity of 10 years, a face value of $1,000, and a coupon rate of 9 percent.

This task can be accomplished using Microsoft Excel 2010. First, open a new Excel workbook and type in the following column headers: Par Value, Coupon Rate, Face Value, Maturity Date (in years), Current Market Value, and YTM. Next, enter the corresponding data from the problem into the appropriate cells under their respective columns. For example, enter 1000 for “Par Value”; 9% for “Coupon Rate”; 10 years for “Maturity Date”; and so on.

Next we need to use the excel function known as Price() to calculate the yields of each bond value listed above. To do this select an empty cell in your worksheet and use this formula: =Price(rate/2 , ‘par value’, 0 ,’maturity date’- ‘current market value’) where rate is referring to your coupon rate divided by 2 (since it is paid semiannually). It should look like this: =Price(4.5%,1000,-0,’10’-945.50). This will give you an annualized yield of 9.87%. Repeat this step for each bond value listed above noting that dependencies may vary due to varying dates entered in previous steps so these values must be changed accordingly in both current formulas just created as well as any other formulas already existing on worksheet .