Pawani
Jun 2, 2009, 02:36 AM
A bond is available for Rs 1400. It offer include one immediate payment nad 10 annual payments of Rs 210 each. Compute the rate of return?
ArcSine
Jun 6, 2009, 08:19 AM
Pawani, check my understanding of your question: The purchase price of this instrument is Rs 1,400. It will return 11 cash flows to the holder, each one of Rs 210. The first of the eleven occurs immediately, and the other 10 are annually, with the first of those being one year out.
If that's the case, the instrument's yield is 9.4377% (rounded a bit, natch).
Hope this helps!
...it was early and I was full of no coffee...
lk_klare
Dec 18, 2010, 08:17 AM
How you have calculated 9.4377%