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.
Let's say the annual interest paid is $50. The current yield of the bond is the interest divided by the current price of the bond, which in this case is $50/$900, or 5.56%. On redemption of the bond after five years, you get the face value of $1000 for the matured bond and realize $100 in capital gain.ield to maturity is a useful measure of the attractiveness of a seasoned bond that is held to maturity and redeemed at par value. For example, suppose you buy a $1000 par value ABC Company bond with a 5% coupon rate maturing in five years, and the market price for the bond is $900.