Question about Texas Instruments BA-II Plus Calculator
I am aware how to find the nominal interest rate in a bond calculation, given and entering in values for N, PV, PMT and FV,
Here is the question that i am working on: bought a 10-year, 10%, $5,000 semi-annual bond at a price of $4,600. She plans to hold the bond to maturity. The yield to maturity on Greta's bond is greater than 10%.
N = 20
PV = -4600
pmt = 250
fv = 500
CPT I/R = 5.76
then i multiply this value by 2 to get the nominal interest rate of 11.36, on this calculator how do i then find out what the effective interest rate is?
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Posted on Jan 02, 2017
Just found out the answer!
Apparently you can't have both FV and PV positive. Try the calculation with one of them being negative.
Posted on Jan 19, 2009
I get 6.085%. Make sure the fv and pmt are of opposite signs. You're either making annual payments and getting a lump sum back at the end, or receiving annual payments and then paying it all back in a lump at the end. Either way, the money is moving in opposite directions.
Posted on Mar 12, 2010
You're entering the interest as a monthly rate. You need to use an annual rate. Instead of .6434 per month, use .6434*12 = 7.7208 for the I/Y value.
Posted on Feb 23, 2011
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