User Manual

50 BA II PLUS™ Calculator
Yield to Maturity on Bond Purchased on Interest Date
A 9% $1,000 semiannual commercial bond has 13 remaining
coupon payments. You can purchase the bond for $852.50
(ignoring commissions). At this price, what is your yield to
maturity and the annual effective rate?
Example: Yield to Maturity
Procedure Keystrokes Display
Set all variables to defaults.
& } !
RST 0.00
Set payments per year to 2.
& [
2
!
P/Y= 2.00

Return to calculator mode.
& U
0.00
Enter number of remaining
coupon payments.
13
,
N= 13.00

Enter bond price.
852.5
S .
PV= -852.50

Calculate the coupon payment.
9
2 6
2
<
1000
N /
PMT= 45.00

Enter bond redemption value.
1000
0
FV= 1,000.00

Compute annual yield.
% -
I/Y= 12.37

Store in memory.
D
1
Example: Effective Annual Interest
(continued from previous example)
Use the Interest Conversion worksheet (Chapter 7) to calculate
the effective annual interest rate.
Procedure Keystrokes Display
Select and clear Interest
Conversion worksheet.
& v
& z
NOM= 0.00
Recall rate from memory.
J
1
!
NOM= 12.37

Enter compounding periods.
#
#
2
!
C/Y= 2.00

Compute annual effective rate.
" %
EFF= 12.75

The annual yield to maturity is 12.37% with semiannual
compounding. The equivalent annual effective rate is 12.75%.