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-   -   How to calculate the selling price of a bond (https://www.askmehelpdesk.com/showthread.php?t=314993)

  • Feb 8, 2009, 09:49 PM
    indianshaft
    How to calculate the selling price of a bond
    After 3 years you decide to sell at 30 yr bond with a 10% semi annunal coupon rate. Bought at 1200. When you sell it market rates will be 2% higher.

    Does that mean I have to calculate NPV after 3 years?
  • Feb 8, 2009, 10:29 PM
    codyman144

    Yes your on the right track...

    What is your answer and maybe we can help.

    Also reading this might help too:

    Advanced Bond Concepts: Bond Pricing
  • Feb 8, 2009, 11:25 PM
    indianshaft

    I don't have an answer yet I will read and get one to you tomorrow sometime.

    Do you by chance know how to work with an excel spreadsheet?

    I have to do an amortization table, and it has 60 payments. And I also need to have beginning and ending balances. I have already copy and pasted the month payment using the pmt function.

    I was wondering if there was a way to make it so that I could just calculate it all at once. Instead of going line by line if you know what I mean. Since the ending and beginning balances change as well as the interest and principle portion.

    Thanks
  • Feb 8, 2009, 11:31 PM
    codyman144

    I'll get back to you tomorrow.
  • Feb 8, 2009, 11:32 PM
    indianshaft
    Also should I go onto the next page of the website or will I be able to find my answer there?

    So far from what I have read, I have

    n=60
    r=.05 or 50 dollars
    y= .06
    par value= 1000

    But on a financial calculator you don't have all that so what I have so far is because I took away 6 payments

    n=54
    I=.06
    pv=-1200
    pmt= 120
    fv=1000

    but what do I compute then?
  • Feb 8, 2009, 11:35 PM
    indianshaft
    I am getting an crazy answer, first I got something like 7,000 then 6,000 both of which I know can't be right.
  • Feb 8, 2009, 11:38 PM
    indianshaft
    All right so I took
    n=54
    I-12
    pmt=120
    fv=1000
    pv=-1000

    but I think that is wrong because it should be pmt 60 because it is semi annual and I should be 6 right?
  • Feb 8, 2009, 11:48 PM
    indianshaft
    I get -1000 so does that mean I sell the bond for 200?

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