Sharp EL-738 operation manual 650, 10000, 15-2023, 720, 9323, 141, 9464

Calculating bond price and accrued interest

A $100, 20-year, 6.5% coupon bond is issued to mature on August 15, 2023. It was sold on November 3, 2006 to yield the purchaser 7.2% compounded semiannually until maturity. At what price did the bond sell? Also calculate the accrued coupon interest.

Procedure	Key operation	Display
Bring up the initial dis-	s	000
play in NORMAL mode.
Select bond calcula-	#	COUPON(PMT)=
tions.		000

Make sure the actual calendar is set (360 is not displayed).

Enter the coupon rate	6.5 Q				COUPON(PMT)=
(%).					650
Enter the redemption	i	100	Q		REDEMPT(FV)=
value.					10000
Enter the settlement	i	11032006		Q	M-D-Y 1=[FR]
date.					11- 3-2006
Enter the redemption	i	08152023		Q	M-D-Y 2=[TU]
date.					8-15-2023
Enter the number of	i2 Q				CPN/Y(N)=
coupon payments per
					200
year.
Enter the annual yield	i	7.2	Q		YIELD(I/Y)=
(%).					720
Calculate bond price.	i @				PRICE(PV)=
					9323
Calculate the accrued	i				ACCU INT=
interest.					141
Calculate bond price	siv+				PV+ANS=
including accrued	i/=
interest.					9464

Answer: The bond sold at $93.23 and the accrued coupon interest was $1.41 (the bond price including accrued interest would be $94.64).

The asking price on the above bond is $92.50. What will your yield be?

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