Bond Pricing - Basics
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BOND PRICING Inputs Rate Convention: 1 = EAR, 0 = APR Annual Coupon Rate (CR) Yield to Maturity (Annualized) (y) Number of Payments / Year (NOP) Number of Periods to Maturity (T) Face Value (FV) Outputs Discount Rate / Period (RATE) Coupon Payment (PMT)
Basics
Annual Percentage Rate
0 5.0% 9.0% 2 8 $1,000
4.5% $25
Calculate Bond Price using the Cash Flows Period 0 1 2 3 4 5 6 Time (Years) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Cash Flows $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 Present Value of Cash Flow $23.92 $22.89 $21.91 $20.96 $20.06 $19.20 Bond Price $868.08 Calculate Bond Price using the Formula Bond Price $868.08 Calculate Bond Price using the PV Function Bond Price $868.08 Calculate Bond Price using the PRICE Function (under APR) Bond Price $868.08
7 3.5 $25.00 $18.37
8 4.0 $1,025.00 $720.76
Basics
Annual Percentage Rate
0 5.0% 9.0% 2 8 $1,000
4.5% $25
Calculate Bond Price using the Cash Flows Period 0 1 2 3 4 5 6 Time (Years) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Cash Flows $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 Present Value of Cash Flow $23.92 $22.89 $21.91 $20.96 $20.06 $19.20 Bond Price $868.08 Calculate Bond Price using the Formula Bond Price $868.08 Calculate Bond Price using the PV Function Bond Price $868.08 Calculate Bond Price using the PRICE Function (under APR) Bond Price $868.08
7 3.5 $25.00 $18.37
8 4.0 $1,025.00 $720.76
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