Sceneryskc

Bond Pricing Formula – Example #1 Let's calculate the price of a bond which has a par value of Rs 1000 and coupon payment is 10% and the yield is 8% The maturity of a bond is 5 years Price of bond is calculated using the formula given below Bond Price = ∑ (Cn / (1YTM)n ) P / (1i)nYield = interest on bond / market price of the bond x 100 Therefore if the bond trades at the initial price of £5,000 Then the yield = (£0 / £5,000) x 100% = 4%The formula to calculate the current yield is pretty simple You take the annual income (the coupon, or dividend, or interest) of your investment and divide that by the current price Annual Income Real Interest Rate Wikipedia What is yield formula