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56 Bond Worksheet
Example: Computing Bond Price and Accrued
Interest
You consider buying a semiannual corporate bond maturing on
December 31, 2005 and settling on June 12, 2004. The bond is based on
the 30/360 day-count method with a coupon rate of 7%, redeemable at
100% of par value. For an 8% yield to maturity, compute the bond’s price
and accrued interest.
Computing Bond Price and Accrued Interest
Answer: The bond price is $98.56 per 100. The accrued interest is $3.15
per 100.
To Press Display
Select Bond worksheet. &l
SDT =
12-31-2000
1
Enter settlement date.
6.1206 !
SDT =
6-12-2006
1
Enter coupon rate. #
7 !
CPN =
7.00
1
Enter redemption date. #
12.3107 !
RDT =
12-31-2007
1
Leave redemption value as is. #
RV = 100.00
Select 30/360 day-count
method.
#&V
360
Leave two coupon payments
per year.
#
2/Y
Enter yield. # 8 !
YLD =
8.00
1
Compute price #C
PRI =
98.56
7
View accrued interest. #
AI = 3.15
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