Calculate the present value of a $1000 discount bond with five years to maturity if the yield to maturity is 6%. Calculate the yield to maturity on a two-year discount bond with face value of $1,440 if the current price is $1,000. Calculate the yield to maturity of a 10-year bond ...
In order to calculate the yield to maturity for a bond, you need the market price, coupon or interest rate and term to maturity. For example, a bond selling at 97.63 is selling at a discount (bond prices are expressed in terms of 100 representing a face value of $1,000) and pays an...
How to calculate an equivalent yield Fully taxable corporate bonds usually generate higher interest payments than fully tax-exempt municipal bonds. But that doesn’t automatically mean these higher-coupon bonds are a sweeter deal when all’s said and done. Assuming all other factors are equal, you...
Understanding Dividend Yield Dividendyieldis a method used to measure the amount of cash flow you're getting back for each dollar you invest in anequity position. In other words, it's a measurement of how much bang for your buck you're getting from dividends. The dividend yield is essential...
Calculate the bond equivalent yield and effective annual return on a jumbo CD that is 120 days from maturity and has a quoted nominal yield of 6.76 percent. Is a yield an annual percentage rate? Suppose that you invest $1,000 in s...
The article discusses how to know the taxable equivalent yields of bond which receive different tax treatments. The marginal tax rate is the first factor to consider which is the percentage tax rate paid on a taxable income. To compute for taxable equivalent yield, the formula would be tax-...
How to Calculate the Future Value of an Investment Suppose you invested $1,000 into a mutual fund or bond fund that you expect to pay a 12 percent annual return over the next five years. To find out what the future value is:
The expected growth rate is an important factor when looking at investing. This can tell you if the investment is likely to rise in value. There are a lot of other factors such as current price and price-to-earnings ratio. Luckily, it's easy to calculate
Current Yield:This figure depends on the bond's price and its coupon (or itsinterestpayment). So if the price of the bond changes, the bond's yield also changes. Formula and Calculation of a Bond Yield The simplest way tocalculate a bond yieldis to divide its coupon payment by the face...
To make an accurate comparison, discount rates should be converted to a semiannual bond basis (SABB), because that is the basis commonly used for longer maturity bonds. To calculate SABB, the same formula to calculate APY is used. The only difference is that compounding happens twice a year....