Join Curt Frye for an in-depth discussion in this video YIELD: Calculating the yield of a security that pays periodic interest, part of Excel 2010: Financial Functions in Depth.
One straightforward way to calculate the value of a bond is to estimate the…bond's yield given the investment's conditions.…Those include the price, the coupon rate, and time to maturity.…In Excel, you can calculate a bond's yield perhaps not surprisingly by using…the YIELD function.…The YIELD function has seven arguments and those are the settlement date which…is the date that you gain control of the security.…Then maturity date which is the date that the investment ends and all money is payable to you.…Then there is the percent coupon argument and that argument gives you the…interest rate, representing the amount of money that you'll receive for each of…your coupon payments.…
Next is the price and this is the price per $100 that you have to pay to gain the security.…Then you have the redemption value which is the base value that you get in…return for your $100 investment.…Your redemption value is almost always $100 and the reason that is, is because…you're receiving coupon interest and the bond's creators basically don't want to pay you twice.…
- Analyzing loans, payments, and interest
- Discovering the interest rate of an annuity
- Determining depreciation using the straight line, declining balance, double-declining balance, and other methods
- Calculating the future value of an investment with variable returns
- Finding the discount rate of a security
- Converting between fractional prices and decimal prices
- Determining the yield of securities that pay interest periodically
Skill Level Intermediate
Q: Where can I learn more about Excel formulas?
A: Discover more on this topic by visiting Excel formulas on lynda.com.
Managing and Analyzing Data in Excel 2010with Dennis Taylor1h 32m Appropriate for all
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 5s
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