Question: You lend $ 1 , 0 0 0 today. The borrower promises to return $ 1 , 8 6 0 in 7 years from now.

You lend $1,000 today. The borrower promises to return $1,860 in 7 years from now. What is the yield to maturity of this loan?
Problem 7
Consider a 3% coupon bond with a $1000 face value and the current price of $1210. It has 10 years to maturity date. What is its YTM? Your solution should have two parts as follows:
a. The theoretical part should explain how from the equation for price of a coupon bond one can obtain an equation for YTM. Clearly state this equation. And clearly state your answer. i.e. what YTM is. using the result of vour R. code (see below).

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