Calculate the Value of Zero Coupon Bonds in Excel 2007


show more Calculating the value of zero coupon bonds provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis show less
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Calculating the value of zero coupon bonds

Bonds that issue coupons or pay interests to investors at regular intervals offer bondholders the option to invest their earnings elsewhere. Some issuers decide to offer zero- coupon bonds, which only pay interest at the end of the investment period. A zero-coupon bond sale lists the price and the payment due when the bond matures, but doesn't usually list the investment's interest rate. You can calculate that rate for yourself using the RATE function. The RATE function has three required arguments and three optional arguments. The required arguments are nper, the number of periods, pmt or payment, which are any payments made each period.

And present value, which is what the investment is worth today. That is the cost to purchase the investment. The optional arguments are fv, the future value of the bond, type, whether you pay at the beginning or end of an investment period and guess, which is a guess as to the interest rate. If you leave guess blank, Excel assumes a value of 10%, ...

Calculating the value of zero coupon bonds
Video duration: 3m 18s 2h 18m Intermediate

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Calculating the value of zero coupon bonds provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis

Subject:
Business
Software:
Excel
Author:
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