Key Concepts:

Bond Pricing: The present value of a bond's future interest payments and
its maturity value.
Formula: P=∑C(1+r)t+F(1+r)nP = \sum \frac{C}{(1 + r)^t} + \frac{F}{(1
+ r)^n}P=∑(1+r)tC​+(1+r)nF​
Where:
PPP = Price of the bond
CCC = Periodic coupon payment
rrr = Discount rate (yield to maturity)
FFF = Face value of the bond
ttt = Time period
Yield to Maturity (YTM): The total return expected on a bond if held until
maturity.
Example:
A bond with a face value of $1,000, a 5% annual coupon rate, and 10 years to
maturity. If the market interest rate is 6%, the price of the bond can be calculated
as: P=∑50(1+0.06)t+1000(1+0.06)10≈$927.69P = \sum \frac{50}{(1 + 0.06)^t} + \
frac{1000}{(1 + 0.06)^{10}} \approx \$927.69P=∑(1+0.06)t50​+(1+0.06)101000​
≈$927.69