How to Compute Present Value of a Bond with 8% Coupon Rate, 5% Yield to Maturity that Matures in 7 years.

By BrandonS33

  • Compute Payment

    (8% x 1000 = $80)

  • Type in N (Years)

    (N = 7)

  • Type in I/Y (Interest)

    (I/Y = 5)

  • Type in PMT (Payment)

    (PMT = $80)

  • Type in FV (Future Value)

    (FV = 1,000)

  • Compute Present Value

    1. CPT Key
    2. PV Key

  • PV = $1,173.59

    This Bond Sells at a Premium.