What is the rate of return on a $12,500 bond purchased at $10,750 with a 15% coupon?

13.04%

17.44%

15%

12.9%

Question

What is the rate of return on a $12,500 bond purchased at $10,750 with a 15% coupon?

 13.04%

 17.44%

 15%

 12.9%

anonymous · Answer

i got 17.44% am i correct @mathstudent55

anonymous · Answer

@mathmale

mathmale · Answer

Really sorry, but I'm not used to problems that involve this term "15% coupon."  Have you on hand any reference material, such as a textbook, online course materials, or the results of Internet searches, that deal with a "15% coupon?"

anonymous · Answer

Yield = $$\frac{ couponamount }{ price}$$ i figured out the 15% of 12500 which gave me 1875 then i divided that by the purchased price which is 10,750 and got 17.44 im just trying to double check my work this test is important to me. @mathmale

mathmale · Answer

At first glance your argument seems sound.  I greatly appreciate your wanting your answer to be correct.  But without doing some research myself (for which I don't have time for at the moment), I can't tell you much more.  Really sorry.  I would not want to guess and then give you incorrect info.

anonymous · Answer

Its alright thank you so much for taking time out to look at it @mathmale