HTTP vs HTTPS The significance of S: Http or the hypertext transfer protocol is something we use when we access the internet. Though we seldom notice it if at all, it plays a very essential role.
This is because the interest rate risk (risk of missing out on higher interest rates) decreases the closer bonds get to their maturity dates. With that, let's use the Bond Value Calculator to calculate the price of a bond given its face value, coupon rate, market rate, and years-to-maturity. Next enter the current market rate and the number of years to maturity, then click the Calculate Bond Valuation button.
In order to calculate the present value of the bond, we must first figure out what the company will pay out over the life of the bond. There are two components: the principal payment of $200,000 at the end of ten years and the interest paid semiannually. For the interest, we will use I=PRT.