Finance Calculator
Texas Instruments BA II +
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VIII.  Bonds

The Bond Worksheet can be used to find either the yield or the price of a bond. The Worksheet can be opened by pressing 2nd Bond (key #9). The up and down arrows will move between entries.

Information needed:

SDT: Settlement date – this is the date at the time of purchase

CPN: Annual coupon rate in percent form

RDT: Redemption date – the date the bond matures

RV: Redemtion value

ACT: The default setting on the calculator is actual, which is actual/actual and is commonly used. The other option is to use a 30/360 setting which assumes 30 days in a month and 360 days in a year. It can be changed by pressing 2nd  SET.

2/Y: Since a majority of bonds in the U.S. pay a biannual coupon, this is the default setting on the calculator. It can be changed to 1/Y by pressing 2nd SET.

YLD: Yield to redemption

PRI: Dollar price of the bond

To calculate the Yield To Maturity

What is the yield of a bond with a coupon rate of 8 that matures in November of the year 2021, with a current price of $127.594, and a redemtion value of $100?

The two date entries should be made in a MM.DDYY format. February 24, 1998 should be entered as 2.2498. For this example, 2-24-98 will be used.

SDT = 2 – 24 – 1998 (2.2498), ENTER, down arrow key

CPN = 8, ENTER, down arrow key

RDT = 11 – 15 – 2021 (11.1521), ENTER, down arrow key

RV = 100, ENTER, down arrow key

ACT – should be at the default settings

2/Y – should be at the default settings, press down arrow key twice to find PRI

PRI = 127.594, ENTER, up arrow key

YLD = Calculate unknown (press CPT), answer is 5.836

If the yield is given and the current price unknown, simply enter the yield first and then calculate the price.

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Last Updated on 1 May 2002, e-mail any comments to: robert.balik@wmich.edu