Discount

10% Rate 15% Rate

Value 1,000 1,000

Coupon 10% 15%

Tenure 10 10
PMT 100 100

PV ($1,000.00) ($749.06)

Yeild to maturity

Par value Bond 1,000

Par value bond price 887
Coupon rate 9%
Tenure 10
PMT 90
Yield to maturity 10.912%

Changes in Bond Values over Time

10% annual coupon 7% annual coupon- 20years bond
Par value Bond 1000 1000
Par value bond price
Coupon rate 5% 7%
Tenure 50 20
PMT 60 70
Yield to maturity
PV ($1,182.56) ($1,000.00)

Bonds with Semiannual Coupons

Par value Bond 1000
Par value bond price
Coupon rate 5%
Tenure 15
PMT 50
Yield to maturity
PV ($1,523.26)
 Premium
5% Rate
1,000

5%
10
100

($1,386.09)

Yield to call
9 5
1,000
887
9%
10
90
11.71% 13.634%

nual coupon- 20years bond 13% annual coupon- 25 years bond

1000 1000 1000

10% 13% 10%

15 25 15
70 130 130

($771.82) ($1,000.00) ($1,228.18)

Number of Expected Expected
years until current capital gain Expected
maturity Price yield yield total return

0 1000
1 $972.73 7.20% 2.73% 10%
2 $947.93 7.38% 2.55% 10%
3 $925.39 7.56% 2.38% 10%
4 $904.90 7.74% 2.21% 10%
5 $886.28 7.90% 2.06% 10%
6 $869.34 8.05% 1.91% 10%
7 $853.95 8.20% 1.77% 10%
8 $839.95 8.33% 1.64% 10%
9 $827.23 8.46% 1.51% 10%
10 $815.66 8.58% 1.40% 10%
11 $805.15 8.69% 1.29% 10%
12 $795.59 8.80% 1.19% 10%
13 $786.90 8.90% 1.09% 10%
14 $779.00 8.99% 1.00% 10%
15 $771.82 9.07% 0.92% 10%

Number of Expected Expected

years until current capital gain Expected
maturity Price yield yield total return

0 1000
1 $1,027.27 12.65% 2.73% 10%
2 $1,052.07 12.36% 2.41% 10%
3 $1,074.61 12.10% 2.14% 10%
4 $1,095.10 11.87% 1.91% 10%
5 $1,113.72 11.67% 1.70% 10%
6 $1,130.66 11.50% 1.52% 10%
7 $1,146.05 11.34% 1.36% 10%
8 $1,160.05 11.21% 1.22% 10%
9 $1,172.77 11.08% 1.10% 10%
10 $1,184.34 10.98% 0.99% 10%
11 $1,194.85 10.88% 0.89% 10%
12 $1,204.41 10.79% 0.80% 10%
13 $1,213.10 10.72% 0.72% 10%
14 $1,221.00 10.65% 0.65% 10%
15 $1,228.18 10.58% 0.59% 10%