An Introduction to Programming Using Visual Basic (10th Edition), Chapter 3, Question 7

One measure of a bond's performance is its Yield to Maturity (YTM). YTM values for government bonds are complex to calculate and are published in tables. However, they can be approximated with the simple formula YTM=(intr+a)/(b), where intr is the interest earned per year, a=(face value - current market price)/(years until maturity), and b=(face value+current market price)/(2). For instance, suppose a bond has a face value of $1000, a coupon interst rate of 4%, matures in 15 years, and currently sells for $1180. Then intr=.04*1000=40, a=(1000-1180)/(15)=-12, b=(1000+11800)/(2)=1090, and YTM=(40-12)/(1090)=2.57%. Note: The face value of the bond is the amount it will be redemmed for when it matures and the coupon interest rate started on the bond. If a bond is purchased when it is first issed, the the YTM is the same as the coupon interest rate. Write a program that requests the face value, coupon interest rate, current market price, and years until maturity for a bond, and then calculate the bond's YTM. See Fig 3.67.