Bond Valuation
WebNotes
Enter the following 4 values
Number of
years
to maturity
Coupon
rate
Face
value
Yield to
maturity

BOND VALUE
Calculator inputs
There are five variables in a bond valuation problem. Using a financial calculator requires that you type in the four known elements (N, PMT, I, and FV) and solve for the one unknown, the present value (PV).
Number of
cash flows
N
Amount of
cash flow
PMT
Yield per
six months
i
Future
value
FV
Solve for PV

Computational details
The value a bond today is the sum of the present value of the interest payments (valued as an ordinary annuity) and the present value of the face value (discounted as a lump-sum):

PV = [ S CFt/(1 + i)t] + [FV / (1 + i)t]
Present value
of interest
Periodic
cash flow
Present value
annuity factor
Present value
of face value
Face
value
Discount
factor

Description: The purpose of this calculator is to provide calculations and details for bond valuation problems. It is assumed that all bonds pay interest semi-annually. Future versions of this calculator will allow for different interest frequency.

Instructions: Fill in the spaces that correspond to the number of years, maturity, coupon rate, and yield-to-maturity, followed by clicking on the "Compute" button. The calculator will provide the rest. The coupon rate and yield-to-maturity can be entered as whole numbers or in decimals.

Based on a demo from Netscape. Modified for bonds by Pamela Peterson. Comments or suggestions? Send them along to Pamela Peterson.


©1996-2002 calculator.com All Rights Reserved