Example: computing bond price and accrued interest – Texas Instruments BA II PLUS User Manual
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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