Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Finance

Video Activity

Principles of FinanceVideo Activity

Using TI BA II+ to Price a Bond

Access multimedia content
1 .
If you are provided with annual information in a bond problem, which bond variables must be adjusted to accommodate semiannual compounding periods, and how must they be adjusted? Review the video to follow along as this information is provided.
2 .

Following the instructions laid out in the video, practice using a calculator to find the price of a bond under two scenarios. The first scenario should be when compounding periods are annual, or once a year, and the second scenario should be when compounding periods are semiannual, or once every six months.

Start out this exercise with the bond factor input variables that are used in the video: par value of $1,000, annual coupon rate of 4%, time to maturity of 10 years, and yield to maturity of 8%. Calculate the current value or price of the bond under both of the different compounding period scenarios.

Once you have arrived at the same results demonstrated in the video, practice calculating prices using different bond factor variables for inputs, changing time or years to maturity, coupon rate (and coupon payments), and yield to maturity until you are completely confident using a financial calculator to find the price or value of any bond.

Bond Pricing, Valuation, Formulas, and Functions in Excel

Access multimedia content

Review the examples included in this video, and practice setting up spreadsheets that solve for each of the five primary bond variables using the values in the videos (maturity 10 years, coupon rate 10%, coupon payment $100, yield to maturity 8%, and par value $1,000). Parallel the spreadsheets that are set up in the video, ensuring that you arrive at the same results for each bond variable amount.

3 .
Name and describe the five primary bond variables that can be solved using Excel spreadsheets.
4 .
What are the Excel functions that allow you to perform these calculations, and where in the standard Excel spreadsheet are they located?
PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-finance/pages/1-why-it-matters
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-finance/pages/1-why-it-matters
Citation information

© Jan 8, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.