Dave harris has just purchased a bond with a face value of $1,000 that pays 6 percent. the purchase price of the bond was $900, and the bond will mature in 5 years. what is the yield to maturity for this bond?

The yield of maturity for this bond is "8.4 percent".

We can calculate this in the following way;

Yield to maturity = YTM = { ($1,000 x. 06) + [ ($1,000 - 900) / 5]}/[ ($900 + $1,000) / 2]

= (60 + 20) / (950)

=80/950

=0.084

=0.084 x 100

= 8.4 percent