Using the Average Rate To Maturity as your discount rate (YTM), Estimate the value of Amazon Corp. bond, if it is issued for 15 years with a 10% annual coupon rate and $1000 face value. Given also that it is priced now at $925.75?

Time Period of bond: 15 years

Face Value of bond : $1,000

Annual Coupon @10% = $ 1,000 * 10% = $ 100

Current price of bond: $ 925.75?

We know that;

Yield to maturity = [Annual Coupon + (Par Value - Current price)/ Period] / (Par Value + Current price) /2

Yield to maturity = [$100 + ( $ 1,000 - $ 925.75)/ 15] / ($1,000 + $ 925.75) /2

Yield to maturity = [$100 + $ 4.95 ] / $ 962.87

Yield to maturity = $104.95 / $ 962.87

Yield to maturity = 0.1090 or 10.90%