Financial & business calculators can be used by college students, people in business, financiers, etc. This mathematical device is essential for many business functions like calculating different types of payments, determining the value of loans, and determining the interest rate for multiple transactions. They can calculate linear regressions, correlations, and weighted averages. These calculators are also used in statistics. Apart from performing basic arithmetic calculations, they assist in solving financial problems that include internal rate of return, net present value, discounted cash flows, mark-up calculations, and loan formulae. These devices are primarily used for computing calculations relating to business like simple interest rates, compound interest rates, number of payments etc. They lend a helping hand to the ones in the field of finance or business.
Usually bonds are issued to help such entities finance big or public projects such as utilities, infrastructure, research and development health related.įoreign bonds issued by states/governments.Financial & business calculators perform many functions that basic calculators cannot.
In finance bonds are often referred to as fixed-income securities as they are a type of investment in which the holder (usually called as the investor) lends money to a bond issuer (usually governmental e.g: foreign governments, municipalities, states or corporate organizations) for a specific period of time while the borrower understands to pay to the investor a fixed interest rate, compounded by the rule negotiated and paid within certain terms. ■ Considering that the bond price is higher than the par value the bond should be selling at a premium. Let’s figure out its correct price in case the holder would like to sell it: Let’s assume that someone holds for a period of 10 years a bond with a face value of $100,000, with a coupon rate of 7% compounded semi-annually, while similar bonds on the market offer a rate of return of 6.5%. IF c r AND Bond price < F then the bond should be selling at a discount. IF c r AND Bond price > F then the bond should be selling at a premium. IF c = r then the bond should be selling at par value. (n = 1 for Annually, 2 for Semiannually, 4 for Quarterly or 12 for Monthly)Īfter the bond price is determined the tool also checks how the bond should sell in comparison to the other similar bonds on the market by these rules: The algorithm behind this bond price calculator is based on the formula explained in the following rows: This figure is used to see whether the bond should be sold at a premium, a discount or at its face valueas explained below. Market interest rate represents the return rate similar bonds sold on the market can generate. This financial calculator approximates the selling price of a bond by considering these variables that should be provided:įace/par value which is the amount of money the bond holder expects to receive from the issuer at the maturity date as agreed.Ĭoupon rate is the annual rate of return the bond generates expressed as a percentage from the bond’s par value.Ĭoupon rate compounding frequency that can be Annually, Semi-annually, Quarterly si Monthly. How does this bond price calculator work?
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