If $1,000,000 of 8% bonds are issued at 102¾, the amount of cash received from the sale is

Cash received from the sale is $ 2,567,200

8% Bonds of $ 1,000,000 are $ 80,000

102¾ is 32.09

and then $ 80,000 x 32.09 = $ 2,567,200

One of the advantages of bonds is that the period of investment varies, the interest rate is stable and the risk is quite small.

Therefore, we will now try to discuss how the bond interest calculation.

Bonds are:

Long-term debt instruments issued with a certain nominal value by an institution with a certain maturity.

To find out how the four bond instruments are calculated, see the explanation below.

How to calculate the nominal yield is:

Coupon Rate = Interest Income: Nominal Value.

How to calculate the current yield is:

Current Yield = Annual Interest Income: Bond Market Price

Here's how to calculate YTM:

YTM = INT + ((M-PV) / n) / ((M + PV) / 2)

Information:

INT = Coupon Value

M = Maturity value / par value

PV = Current bond price

N = The length of time the bond is due

For YTC calculations are as follows:

YTC = (Annual Interest + ((Call Price-Market Price) / Number of Years to Call)) / ((Call Price + Market Price) / 2)

Information:

P = Current Bond Price

Number of years to call = the number of years up to the nearest yield to call

Annual interest = coupon income per year

Call Price = call price of a bond

Realized Yield

Realized yield is the rate of return that an investor expects from a bond. In addition, realized yield can be used to estimate the level of return that an investor can obtain using a trading strategy.

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Bonds

Sales Profit

Details

Class: college

Subject: Business

Keywords: profit, sales, bonds

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