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  • Bond Pricing by J Maguta

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    jonathan maguta
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    This document provides calculations to determine the price of a bond with a face value of $1,000, coupon payments of $25 every year for 8 years, and a discount rate of 9% per period. It calculates the bond price in three ways: using cash flows and present value, using the bond pricing formula, and using the PV function. All three methods result in a bond price of $640.24.

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    Bond Pricing Excel Formulae

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    This document provides calculations to determine the price of a bond with a face value of $1,000, coupon payments of $25 every year for 8 years, and a discount rate of 9% per period. It calculates the bond price in three ways: using cash flows and present value, using the bond pricing formula, and using the PV function. All three methods result in a bond price of $640.24.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    6 views2 pages

    Bond Pricing by J Maguta

    Uploaded by

    jonathan maguta
    This document provides calculations to determine the price of a bond with a face value of $1,000, coupon payments of $25 every year for 8 years, and a discount rate of 9% per period. It calculates the bond price in three ways: using cash flows and present value, using the bond pricing formula, and using the PV function. All three methods result in a bond price of $640.24.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    BOND PRICING Annual Payments

    Inputs
    Number of Periods to Maturity(T) 8
    Face Value(PAR) $ 1,000.00
    Discount Rate/Period® 9%
    Coupon Payment(PMT) 25

    Calculate Bond Price using the Cash Flows


    Period 0 1 2 3 4
    Cash Flows 25 25 25 25
    Present Value of Cash Flow 22.93578 21.042 19.30459 17.71063
    Bond Price $ 640.24

    Calculate Bond Price using the Formula


    Bond Price $ 640.24

    Calculate Bond Price using the PV Function


    Bond Price $ 640.24
    5 6 7 8
    25 25 25 1025
    16.24828 14.90668 13.67586 514.4129

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