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BA II Plus: Bond Price Calculation Step by Step
How to calculate a bond price on the BA II Plus with annual and semiannual coupon inputs.
TL;DR
Bond price is a TVM problem: N is coupon periods, I/Y is yield per period, PMT is coupon per period, FV is par, and CPT PV gives the price.
Formula Reference
Bond price
Price = PV(coupons) + PV(par)The BA II Plus computes this through TVM registers.
BA II Plus Keystrokes
- 2nd CLR TVM
- N = years x coupon frequency
- I/Y = annual YTM / coupon frequency
- PMT = par x coupon rate / coupon frequency
- FV = par
- CPT PV
Worked Example
- 5-year annual-pay bond, 6 percent coupon, 8 percent YTM, $1,000 par.
- 5 N; 8 I/Y; 60 PMT; 1000 FV; CPT PV.
- PV is -920.15, so price is $920.15.
Common Mistakes
- Not adjusting inputs for semiannual coupons.
- Entering coupon rate instead of coupon dollars as PMT.
- Treating the negative PV sign as an error.
Related Guides
- CFA Level I Fixed Income Calculations - Bond pricing, yield, duration, convexity, spot rates, and forward rates for CFA Level I.
- How to Calculate Modified Duration - Formula, worked example, BA II Plus workflow, and common mistakes for modified duration.
- CFA Level I Fixed Income Formula Sheet - Public formula sheet for bond pricing, yield, duration, convexity, spot rates, and forward rates.