Bond Worksheet on BAII Plus Calculator
Tutoring and Learning Centre, George Brown College 2014 www.georgebrown.ca/tlc
The bond worksheet on a BAII Plus calculator can compute the bond price, the yield to
maturity or call, and accrued interest.
To access the bond worksheet, press [2nd] [BOND]. Use the [↓] or [↑] keys to access
bond variables.
To reset the Bond worksheet to default values, press [2nd] [CLR WORK].
Bond data is entered into the worksheet in the following order:
Variable
Term
Definition
Display
Variable
Type
1.
SDT
Settlement
date
The date on which a
bond is exchanged for
funds
SDT= dd.mmyy
Enter only
2.
CPN
Coupon
rate
The annual interest rate
printed on the bond
CPN =
Enter only
3.
RDT
Redemption
date
The date on which the
issuing agency retires
the bonds (can be
maturity date or call
date).
RDT =
dd.mmyy
Enter only
4.
RV
Redemption
value (% of
par value)
The amount paid to the
owner of the bond when
retired. The default is
100% or at par value.
RV =
Enter only
5.
ACT/360
ACT = actual/actual-day
count method
360 = 30/360 day count
method
ACT is default
To change
setting, press
[2nd] [SET]
Setting
6.
2/Y or
1/Y
Coupons
per year
2/Y = two coupons per
year; interest payments
are semi-annual
1/Y = one coupon per
year, interest payments
are annual
2/Y is default
To change
setting, press
[2nd] [SET]
Setting
7.
YLD
Yield to
redemption
or Yield to
maturity
The rate of return
earned from payments
of principal and interest,
with interest
compounded semi-
annually at the stated
yield rate.
YLD =
Enter or
compute
8.
PRI
Dollar price
Price of the bond
(Important note: price is
PRI =
Enter or
compute
Tutoring and Learning Centre, George Brown College 2014 www.georgebrown.ca/tlc
expressed in terms of
dollars per $100 of par
value)
9.
AI
Accrued
interest
Amount of interest
accrued (Important note:
price is expressed in
terms of dollars per $100
of par value)
AI =
Auto-
compute
Example 1:
A $2500 bond pays interest at 8% semi-annually and is redeemable at par at the end of
5 years. Determine the purchase price to yield a holder, if the bond pays 10%
compounded semi-annually.
Term
SDT =
Enter. Press [↓].
CPN =
Enter. [↓].
RDT =
Enter. [↓].
RV =
Enter. [↓].
ACT/360 =
[2nd] [SET] if display shows 360
2/Y or 1/Y
[2nd] [SET] if display shows 1/Y
YLD =
Enter. [↓].
PRI =
Press [CPT].
Display shows PRI = 92.27826507
Remember that the 92.27826507 value is per $100 at par.
Therefore, for a $2500 bond, the purchase price = 92.27826507 x (2500/100) = 2306.96
The purchase price of the bond is $2306.96.
Example 2:
A $5000 bond maturing at 105 on September 1, 2031, has semi-annual coupons at 7%.
Determine the purchase price on March 1, 2010 to guarantee a yield of 𝑗
2
=6.8%.
Press [2nd] [BOND]. Press [2nd] [CLR WORK].
Term
SDT =
Enter. Press [↓].
CPN =
Enter. [↓].
RDT =
Enter. [↓].
RV =
Enter. [↓].
Tutoring and Learning Centre, George Brown College 2014 www.georgebrown.ca/tlc
ACT/360 =
[2nd] [SET] if display shows 360
2/Y or 1/Y
[2nd] [SET] if display shows 1/Y
YLD =
Enter. [↓].
PRI =
Press [CPT].
Display shows PRI = 103.4300944
Remember that the 103.4300944 value is per $100 at par.
Therefore, for a $5000 bond, the purchase price = 103.4300944 x (5000/100) = 5171.50
The purchase price of the bond is $5171.50.
Practice Problems:
1. A $5000 bond with a coupon rate of 6.5%, payable semi-annually, matures in 10
years. What should be the purchase price of the bond for a yield of 5.8%
compounded semi-annually?
2. A local municipal government issues $1 million bonds with a ten-year maturity
date. Interest on the bonds is 3% payable annually. What is the issue price of the
bonds if the bonds are sold with a 4% yield compounded semi-annually?
3. A $10,000 bond is redeemable at par and bears interest at 10% compounded
semi-annually. What is the purchase price of the bond ten years before maturity if
the market rate is 8% compounded semi-annually?
4. A $50,000, 3.2% bond with annual interest coupons redeemable at par in ten
years is purchased to yield 4% compounded semi-annually. What is the
purchase price?
Answers:
1. $5262.78
2. $918,891.04
3. $11,359.03
4. $46,755.64