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56 Bond Worksheet
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
Answer: The bond price is $98.56 per 100. The accrued interest is $3.15
per 100.
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
method.
# & V 360
Leave two coupon payments
per year.
# 2/Y
Enter yield. # 8 ! YLD = 8.00
Compute price # % PRI =
98.56
View modified duration # DUR =
1.44