Please Show BAII Plus Calculator process Four years ago the

Please Show BAII Plus Calculator process

Four years ago, the XYZ Corporation issued an 8% coupon (paid semi annually), 20-year, AA-rated bond at its par value of $1000. Currently, the yield to maturity on these bonds is 10%. Calculate the price of the bond today

Solution

Using financial calculator BA II Plus - Input details:

#

I/Y = Rate or yield / frequency of coupon in a year =

             5.000000

PMT = Payment = Coupon rate x FV / frequency = 8%*1000/2

-$40.00

N = Total number of periods = Remaining years x frequency = 16 x 2 =

32

FV = Future Value or Face Value =

-$1,000.00

CPT > PV = Present Value of Bond = Price of bond =

$841.97

Using financial calculator BA II Plus - Input details:	#
I/Y = Rate or yield / frequency of coupon in a year =	5.000000
PMT = Payment = Coupon rate x FV / frequency = 8%*1000/2	-$40.00
N = Total number of periods = Remaining years x frequency = 16 x 2 =	32
FV = Future Value or Face Value =	-$1,000.00
CPT > PV = Present Value of Bond = Price of bond =	$841.97