Sharp EL738C EL-738 Operation Manual - Page 47

Calculating bond price and accrued interest

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Calculating bond price and accrued interest A $100, 20-year, 6.5% coupon bond is issued to mature on August 15, 2023. It was sold on November 3, 2006 to yield the purchaser 7.2% compounded semiannually until maturity. At what price did the bond sell? Also calculate the accrued coupon interest. Procedure Key operation Bring up the initial dis- s play in NORMAL mode. Display 000 Select bond calculations. # COUPON(PMT)= 000 Make sure the actual calendar is set (360 is not displayed). Enter the coupon rate 6.5 Q (%). COUPON(PMT)= 650 Enter the redemption value. Enter the settlement date. i 100 Q i 11032006 Q REDEMPT(FV)= 10000 M-D-Y 1=[FR] 11- 3-2006 Enter the redemption i 08152023 Q M-D-Y 2=[TU] date. 8-15-2023 Enter the number of coupon payments per year. Enter the annual yield (%). i 2 Q i 7.2 Q Calculate bond price. i @ Calculate the accrued i interest. CPN/Y(N)= 200 YIELD(I/Y)= 720 PRICE(PV)= 9323 ACCU INT= 141 Calculate bond price including accrued interest. s i v + i / = PV+ANS= 9464 Answer: The bond sold at $93.23 and the accrued coupon interest was $1.41 (the bond price including accrued interest would be $94.64). The asking price on the above bond is $92.50. What will your yield be? 46

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46
Calculating bond price and accrued interest
A $100, 20-year, 6.5% coupon bond is issued to mature on
August 15, 2023. It was sold on November 3, 2006 to yield the
purchaser 7.2% compounded semiannually until maturity. At
what price did the bond sell? Also calculate the accrued coupon
interest.
Procedure
Key operation
Display
Bring up the initial dis-
play in NORMAL mode.
s
000
Select bond calcula-
tions.
#
COUPON(PMT)=
000
Make sure the actual calendar is set (
360
is not displayed).
Enter the coupon rate
(%).
6.5
Q
COUPON(PMT)=
650
Enter the redemption
value.
i
100
Q
REDEMPT(FV)=
10000
Enter the settlement
date.
i
11032006
Q
M-D-Y
1=[FR]
11-
3-2006
Enter the redemption
date.
i
08152023
Q
M-D-Y
2=[TU]
8-15-2023
Enter the number of
coupon payments per
year.
i
2
Q
CPN/Y(N)=
200
Enter the annual yield
(%).
i
7.2
Q
YIELD(I/Y)=
720
Calculate bond price.
i
@
PRICE(PV)=
9323
Calculate the accrued
interest.
i
ACCU
INT=
141
Calculate bond price
including accrued
interest.
s
i
v
+
i
/
=
PV+ANS=
9464
Answer:
The bond sold at $93.23 and the accrued coupon
interest was $1.41 (the bond price including accrued
interest would be $94.64).
The asking price on the above bond is $92.50. What will your
yield be?