HP 12C User Manual page 3

hp calculators
HP 12C Bonds
The HP12C allows either the YTM or bond price to be calculated, provided one of the two is known. The TVM registers
¼, $ and P are used to hold the necessary data, as shown below:
Then enter settlement date and maturity date separated by \ and press fS to calculate yield to maturity or
fE to calculate both bond price and the amount of accrued interest. If price is calculated, the display shows the
bond price and the amount of accrued interest can be brought to the display by pressing ~ and/or the net price can
be calculated by pressing +. Dates must be entered according to current date mode.
Practice calculating with bonds
Example 1: What price should be paid on August 10, 2003 for a 6¾% U.S. Treasury bond that matures on May 1, 2018
considering a yield of 8
MM.DDYYYY date format.)
Solution: To make sure there is no residual value from previous calculations, clear the TVM registers contents to
zero and set MDY mode prior to start the calculation:
fG gÕ
Now enter the initial data:
6.75 P 3 \ 8 z 8 + ¼
Enter the settlement and maturity dates and compute the bond price:
8.102003 \
5.012018 fE
To verify the amount of accrued interest and then calculate the net price:
~
hp calculators
Register
annual coupon rate (percentage)
P
quoted price (percent of par)
$
yield to maturity
¼
/ %? The coupon payments are semi-annual. (The example assumes
3
8
- 3 -
Contents
Figure 3
Figure 4
HP 12C Bonds - Version 1.0