The Saleemi​ Corporation's ​$1 comma 000 bonds pay 9 percent interest annually and have 15 years until maturity.  You can purchase the bond for ​$1 comma 135.
a.  What is the yield to maturity on this​ bond?
b.  Should you purchase the bond if the yield to maturity on a​ comparable-risk bond is 6 ​percent?

To solve these questions, we'll calculate the yield to maturity (YTM) on the bond, and then compare it with the yield on a comparable-risk bond to determine if it should be purchased.

### Part (a): Calculating the Yield to Maturity (YTM)
The Yield to Maturity (YTM) can be calculated using the following formula:

\[
\text{YTM} \approx \frac{C + \frac{F - P}{n}}{\frac{F + P}{2}}
\]

Where:
- $C$ is the annual coupon payment,
- $F$ is the face value of the bond,
- $P$ is the price of the bond,
- $n$ is the number of years to maturity.

Given:
- Face Value $F = \$1,000$
- Annual Coupon Rate = 9%
- Coupon Payment $C = 0.09 \times 1000 = \$90$
- Price of the Bond $P = \$1,135$
- Number of Years to Maturity $n = 15$

Now we will calculate the YTM.

### Part (b): Should You Purchase the Bond?
After calculating the YTM, compare it to the yield on a comparable-risk bond (6%). If the YTM is greater than 6%, the bond is a good investment. If it's less, it might not be.

Let's start by calculating the YTM. I'll do that now.### Part (a): Yield to Maturity (YTM)
The approximate yield to maturity (YTM) on the bond is **7.59%**.

### Part (b): Should You Purchase the Bond?
Since the YTM of 7.59% is higher than the yield on a comparable-risk bond (6%), it would be advantageous to purchase this bond. The bond offers a better return relative to other bonds of similar risk.

Would you like more details on any of these steps or have further questions?

Here are some related questions you might consider:
1. How does the YTM compare to the coupon rate of a bond?
2. What are the factors that affect the YTM of a bond?
3. How would the YTM change if the bond price increased or decreased?
4. What is the difference between YTM and current yield?
5. How does the time to maturity affect the YTM of a bond?

**Tip:** When comparing bonds, always consider both YTM and the bond's credit rating to ensure you're making a well-informed investment decision.

Learn how to calculate the yield to maturity (YTM) for Saleemi Corporation's $1,000 bonds paying 9% interest annually and priced at $1,135. Determine whether it's advantageous to purchase these bonds compared to a comparable-risk bond yielding 6%.

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