A calculator is a devise used for solving math and scientific formulas. Its used by students homemakers, and professionals. Its also a term used in the financial world to calculate how interest , and recruits are determined and paid to investors. Its important for investors to understand and to be able to calculate interest payments
In a case of calculating bond performance there are necessary variables to know. The current price of the bond or the price you pay to purchase the bond is the first thing. The bond par value is the price of the bond when it matures. Its also known as the redemption value,. This is the amount of money the investor would receive when he redeems the bond. The bond coupon rate is the rate of interest paid to the investor. If the coupon rate is 10 percent, and the par value is $1000 then the purchaser would receive $100 per year.
The years of maturity is also necessary to calculate the yield. The years of maturity is simply the length of time till the bond can be cashed. The bond yield is the rate of interest paid to the bond holder, based on the purchasing price, and the interest payments made on the bond. The bond yield to maturity is takes the difference between the bonds current price, and its par value, as well as the rate of interest paid on the bond. The current bond yield calculator uses these things to get the value of the bond. For example. If the current bond price is $800, and the bond par value is $1000, the bond coupon rate is 8%, and the years of maturity is 10 years. This results in a current bond yield of 10 percent, and a bond yield to maturity of 11.462 percent. This calculation lets the investor know the actual value of the bond at the present time
Basically a calculator is the formula needed to determine how interest is determined, and prices of funds and stocks in the finance world.. There are many online sites that have a fianc? calculator already in place. Investors only need to insert the proper figures to get the answers, and calculations of their interest, and redemptions.