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ArgieBond Calculator
The purpose of this calculator is to provide calculations and details for bond valuation problems.
Instructions: Fill in the spaces that correspond to the number of years, maturity, coupon rate, and yield-to-maturity,
Future Value of AnnuityFV = C + C( 1 + r ) + C ( 1 + r )2 + ... + C( 1 + r )n - 1 = C [((1+r)n-1)/r]where C is the cashflow and n is the number of cashflows. Net Present Value of AnnuityNPV = C / (1 + r) + C / (1 + r)2 + ... + C / (1 + r)n = C { 1 - [1/(1+r)n] / r }where C is the cashflow and n is the number of cashflows.
Continuous CompoundingFrom compounding m times per year to continuous compounding:rc = m * ln( 1 + rm / m ) From continuous compounding to compounding m times per year: rm = m( erc / m - 1 ) Example
Next, consider an interest rate that is quoted 12% per annum with continuous compounding. The equivalent rate with annual compounding is r1 = 1 (e0.12/1 - 1 ) 0.1275 = 12.75%
Compounding FrequencyFrom compounding m times per year to annual compounding:r = (1 + rm / m) m - 1 From annual compounding to compounding m times per annum: rm = m * [ (1 + r)(1/m) - 1 ] Example
r = ( 1 + 0.08 / 4 )4 - 1 = 0.0824 = 8.24% From m to n compoundings per annum: The formula below can ber used to transform a rate rn with n compoundings per year to a rate rm with m compoundings per year rn = n * [ ( 1 + rm / m )m/n - 1 ] ExampleConsider a rate with compounding frequency four times per year.If the rate is 7% then the equivalent rate with semiannual compounding: r2 = 2 * [ ( 1 + 0.07 / 4 )4/2 - 1 ] = 0.0706 The equivalent rate with semiannual compounding is 7.06%
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