What is the yield to maturity on a simple loan that requires payment of $500 plus $30 in interest one year from now?
A) 5.3%
B) 6%
C) 6.38%
D) Not enough information has been provided to determine the answer.

Question

Quizplus · Accepted Answer

The yield to maturity (YTM) on a simple loan can be calculated using the formula: YTM = (Interest / Principal) * 100. Here, the interest is $30 and the principal is $500. Therefore, YTM = ($30 / $500) * 100 = 6%.

What Is the Yield to Maturity on a Simple Loan