Texas Instruments BA-20 Profit Manager User Manual - Page 60
Example: Computing Bond Price and Accrued Interest
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Example: Computing Bond Price and Accrued Interest You consider buying a semiannual corporate bond maturing on December 31, 2007 and settling on June 12, 2006. 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, accrued interest, and modified duration. Computing Bond Price and Accrued Interest To Press Display Select Bond worksheet. & l SDT = 12-31-1990 Enter settlement date. 6.1206 ! SDT = 6-12-2006 Enter coupon rate. # 7 ! CPN = 7.00 Enter redemption date. # 12.3107 ! RDT = 12-31-2007 Leave redemption value as is. # RV = 100.00 Select 30/360 day-count # & V 360 method. Leave two coupon payments # 2/Y per year. Enter yield. # 8 ! YLD = 8.00 Compute price # % PRI = 98.56 View modified duration # DUR = 1.44 Answer: The bond price is $98.56 per 100. The accrued interest is $3.15 per 100. 56 Bond Worksheet