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Business, 05.08.2021 03:20 Rakeem458

To pay for​ college, you have just taken out a​ $1,000 government loan that makes you pay​ $126 per year for 25 years.​ However, you​ don't have to start making these payments until you graduate from college two years from now. Why is the yield to maturity necessarily less than​ 12% (this is the yield to maturity on a normal​ $1,000 fixed-payment loan in which you pay​ $126 per year for 25​ years)?

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To pay for​ college, you have just taken out a​ $1,000 government loan that makes you pay​ $12...
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