BrutusAI Result: Using A Financial Calculator Or A Spreadsheet, Calculate The Yield

Using a financial calculator or a spreadsheet, calculate the yield

To calculate the yield to maturity (YTM) of the bond described, we can follow these steps:

Information provided:
- Face value (FV) = $10,000
- Semi-annual coupon rate = 3.5% (which means the semi-annual coupon payment = $10,000 * 3.5% / 2 = $175)
- Current price (PV) = $9,929
- Number of years remaining = 4 years (which means there are 8 semi-annual periods since coupons are paid semi-annually)
Using the YTM formula: The YTM can be calculated using a financial calculator or a spreadsheet function. The YTM formula is derived from the equation of bond pricing:

[ P = \sum_{t=1}^{N} \frac{C}{(1 + YTM)^t} + \frac{FV}{(1 + YTM)^N} ]

Where:
- (P) = Current price of the bond
- (C) = Semi-annual coupon payment
- (FV) = Face value of the bond
- (t) = Each semi-annual period (from 1 to total number of periods)
- (N) = Total number of semi-annual periods
Using a financial calculator or spreadsheet: You can enter the following values:
- N = 8 (total periods)
- PMT = 175 (coupon payment)
- FV = 10000 (face value)
- PV = -9929 (current price, entered as negative to represent cash outflow)
Using Excel: The formula for YTM in Excel can be calculated using the RATE function. For example, you could use:
```
=RATE(8, 175, -9929, 10000) * 2
```
(The multiplication by 2 is to annualize the semi-annual rate to an annual figure.)

From the calculation, the yield to maturity (YTM) would be approximately 3.56% when rounded to two decimal places.

Thus, the YTM is 3.56.