Explain why is the yield to maturity necessarily less

Reference no: EM13232977

to pay for college, you have just taken out a $1000 gov. loan that makes you to pay $126 per year for 25 years. however, you don't have to start making the payment until you graduate from college two years from now. why is the yield to maturity necessarily less than 10%, the yield to maturity on a normal $1000 fixed-payment loan in which you pay $126 per year for 25 years?

Reference no: EM13232977

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