Bond Prices Rates And Yields Fidelity
The bonds current yield is 6.7 1,200 annual interest 18,000 x 100. But the bonds yield to maturity in this case is higher. It considers that you can achieve compounding interest by reinvesting the 1,200 you receive each year. It also considers that when the bond matures, you will receive 20,000, which is 2,000 more than what you paid.