Section 4: Additional Financial Functions 67
Bond Calculations
The HP 12C Platinum enables you to solve for bond price (and the interest
accrued since the last interest date) and the yield to maturity.
18
The E and
S calculations are done assuming a semiannual coupon payment and using an
actual/actual basis (such as for U.S. Treasury bonds and U.S. Treasury notes). In
accordance with market convention, prices are based on a redemption (par) value
of 100.
To calculate bond price and yield for a 30/360 bond (that is, using the basis of a
30-day month and a 360-day year – such as for municipal bonds, corporate
bonds, and state and local government bonds), and to calculate bond price for
bonds with an annual coupon payment, refer to Section 16: Bonds.
Bond Price
1. Enter the desired yield to maturity (as a percentage), using ¼.
2. Enter the annual coupon rate (as a percentage), using P.
3. Key in the settlement (purchase) date (as described on page 30), then press
\.
4. Key in the maturity (redemption) date.
5. Press fE.
The price is shown in the display and also is stored in the PV register. The
interest accrued since the last interest date is held inside the calculator: to display
the interest, press ~; to add the interest to the price, press +.
Example: What price should you pay on April 28, 2004 for a 6¾% U.S.
Treasury bond that matures on June 4, 2018, if you want a yield of 8¼%.
Assume that you normally express dates in the month-day-year format.
18.
All bond calculations are performed in accordance with. the Securities Industry Association’s
recommendations as contained in Spence, Graudenz, and Lynch, Standard Securities
Calculation Methods, Securities Industry Association, New York, 1973.
Keystrokes (RPN mode) Display
8.25¼
8.25
Enters yield to maturity.
6.75P
6.75
Enters coupon rate.
gÕ
6.75
Sets date format to month-day-year.
4.282004\
4.28
Enters settlement (purchase) date.
6.042018
6.042018
Enters maturity (redemption) date.
fE
87.62
Bond price (as a percent of par).
+
90.31
Total price, including accrued
interest.
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