Bond price calculation query

deepakkrkanodia
Finance Junkie
Posts: 49
Joined: Thu Aug 09, 2012 4:45 pm

Bond price calculation query

Postby deepakkrkanodia » Mon Jan 21, 2013 3:37 pm

Q. Company ABC purchased a 5% annual coupon bond, 10 years maturity, with a face value of $100 and market value $100,000 on Dec 31 2011. The market value on purchase is $100. On March 31 2012, its YTM is 6% and it is to be reported on ABC’s balance sheet.

Query Plz explain how bond price on March 31st 2012 is calculated as $92.7486

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shreyas
Finance Junkie
Posts: 83
Joined: Thu Jul 19, 2012 6:49 pm

Bond price calculation query

Postby shreyas » Tue Jan 29, 2013 3:10 pm

Hi Deepak,

Use you Texas Instrument
Insert N=9.75(Since three months have passed, so the maturity is reduced)
I/Y= 6%(The new market rate of Interest)
PMT= $5(5% of 100)
FV= 100
Compute(CPT) PV
You will get the answer as 92.7. Thanks


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