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.
Fill in the fields that correspond to the number of years, maturity, coupon rate, and yield-to-maturity, followed by clicking on the Calculate button. The calculator will provide the rest. The coupon rate and yield-to-maturity can be entered as whole numbers or in decimals.
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).
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]
Bond Valuation version 0.1 Written by Calculator team Credits Based on a demo from Netscape. Modified for bonds by Pamela Peterson.