How to Calculate Bond Prices and Yields Using a Financial Calculator

Many financial calculators have fairly sophisticated built-in bond valuation routines. However, these vary quite a lot in implementation, and not all financial calculators have them. As a result, we will illustrate a simple way to handle bond problems that will work on just about any financial calculator.

To begin, of course, we first remember to clear out the calculator! Next, for Example 7.2, we have two bonds to consider, both with 12 years to maturity. The first one sells for $935.08 and has a 10 percent coupon rate. To find its yield, we can do the following:

Enter

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