Motto: I am proud to be a Cloverdale Cowboy, and the future of America. I have respect for myself, others, and property. There is no limit to what I can achieve. I promise to accept the challenges that will make me a leader of tomorrow. Welcome to Cloverdale Elementary School.
The present value of the face value (i.e. the maturity value) is calculated as follows: Therefore, the price of a bond is given by the following formula: Example 1: Bond with annual coupon payments. Company A has issued a bond having face value of $100,000 carrying annual coupon rate of 8% and maturing in 10 years. The market interest rate is 10%. The price of the bond is calculated as the present value of all future cash flows: Example 2: Bond with semiannual coupon payments. Company S has issued a bond having face value of $100,000 carrying coupon rate of 9% to be paid semiannually and maturing in 10 years.
Calculate the bond price using the inputs T, PMT, PAR, and the Discount Rate / Period in cell B22. Specifically, enter =-PV(B22,T,PMT,PAR) in cell B24 and copy the cell B24 to the range C24:U24. 6.Current Bond Price. Calculate the bond price using the original inputs. Copy the formula in cell B24 to cell B25. Then change the yield to maturity from B23 to r. so that the formula reads =-PV(r.,T,PMT,PAR) and copy the cell B25 to the range C25:U25.