Formulas for 312 Midterm

Face Value -A

F

# of compounding periods in a year -A

m

# of years to maturity -A

N

# of periods to maturity -A

n

Annualized interest rate (YTM) -A

R

Periodic Interest rate -A

r

Coupon payments per period -A

c

Coupon payments per year  -A

C

n-period rate at time t -A

yt^n

Bond Price -A

B

Dollars  -A

C

Interest/annual rate -A

r

Years/frequency of compounding -A

T

Principle -A

P

Annual percentage rate -A

APR

Cash flow discounting

# of periods to maturity (n)

N x m

Periodic Interest rate (r)

R/m

Coupon payments per year (C)

Coupon rate x F

Coupon payments per period (c)

C/m

Zero coupon bond formulas - Method 2

Zero coupon bond formulas - Method 1

coupon bond = an annuity + a zero-coupon bond

Full Bond price (B)

Accrued Interest

(Days since Last payment / Days in coupon period) x Coupon Payment

Dirty Price

Clean price + Accrued interest 

Clean Price 

Dirty price - Accrued interest 

YTM (R)

IDK - CHANGE

Expectation Theory

Fisher Equation

(1 + Real rate) = (1- nominal rate)/(1+Inflation)

Compounding & Future Value 

C(1+r)^T

Present Value (One period) 

Discounting & Present Value (multiple periods)

Discounting Multiple Cash Flows

Perpetuities

PV = C/r

Growing Perpetuities

PV = C / (r-g)

Annuity

Growing Annuity 

General Formula

Effective Annual Rate (EAR)

Net Present Value (NVP)

PV (benefits) - PV (costs)