Thank you for the YTM video i have been struggling to complete my assignment for few days now. after watching this video i completed in less than 15 munites.
@tackleashley I got that a lot too. The cause of error 5 is having both PV & FV negative or positive. One has to be outflow and one has to be input, meaning one negative; one positive.
(1+3.35%)^2 gives you the effective annual yield (EAY or EAR), which is fine. But, the B-E (basis) yield of 3.35%*2 is a stated (or nominal) rate. By convention a rate is typically stated; e.g., stated rate of x% with semi-annual/annual/continuous compounding.
Well, so I figured out maybe I should work this backward. So what I did was I calcualted Bond price using PV functions = PV(Rate,nper,PMT), then from there I calculate the YTM, using your tutorial (RATE functions) then I use the PRICE function to calculate the bond price again. However, the price I calculated using the PRICE function doesn't match the one I used PV function... I truly appreciate your time
@alexzivo when you enter 950 for PV, be sure to press the +/- button, and then enter it as the PV. If you miss this then you will get the error message.
My excel "rate" function returns a zero rate of return when I use this example. Any Idea what I may be doing wrong. I have repeated it numerous times with what I think is exactly the same formula used in the example. =Rate(nper,pmt,pv,fv). Number of payments, 20. Payment $30. Present Value -950. Future Value 1000. =0????
its an interesting solution, but aplying it in some cases wont work. For instance a bond that pays monthly an interest of 0.431% and pays montlhy equal amortizations with a technical price of 90.32 and a market price of 68.6: maturity at jan 2016 will give 3,94 with your solution and the real IRR as today was 17.21%. Am i missing something?
Thank you for the video it really explains the steps needed clearly, there is a question, If I were a company, is PV = Current market price of the bonds = Net Proceeds of the bonds?
Hi I am having troubles with finding yield to maturity from following information.... • 550 Debentures were issued with a face value of $1,000 trading at par value of 8.5%...... no time frame given.....cheers, from Australia
Thank you for this great video tutorial, I have this problem that it's killing me because I can't figure out the YTM when I am asked to calculate the bond price as well. I hope you can help me out. In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5985%. Calculate (1) YTM and (2) the bond's price...(I have to use the PRICE Excel function to calculate the bond's price)
Hi there, I'm having so much trouble answering this question. Can you please explain how you would use the rate function to solve this equation? The question is you you own a bond at 64.00 in interest annually. The face value is 1000.00 dollars, and the current market price is 1062.50. The bond matures in 11 years. What is the yield to maturity? I'm trying to find the :NPERPMTPVFVTypeGuess This is all being done in Excel? I'm so confused by this question. Please help asap!
yield is given by =RATE(11, 64, -1062.5, 1000) = 5.6228%. With the calculator: 11 N, -1062.5 PV, 64 PMT, 1000 FV and solve with CPT I/Y = 5.6228 (your PV should be negative b/c its an outflow while the PMT and FV are inflows)
Thank you very much for the video, it was very helpful in solving my first calculation, but my second one doesnt seem to work! im told a bond has 10 years until maturity, a coupon rate of 8% and sells for $1100. I calculated my current yield on the bond as (80/1100 ) * 100 = 7.27% and i next needed to calculate the yeild to maturity. But when i followed your steps in excel my rate answer was #NUM! ... any ideas why ? thank you.
Thank you for the YTM video i have been struggling to complete my assignment for few days now. after watching this video i completed in less than 15 munites.
You're welcome! We are so glad that our video helped you! Thanks for watching :)
It doesn't matter what course I'm doing or what country I'm in, the Bionic Turtle always seems to save me. Hats off to Harper.
Great. 12 years after still helpful.
I am doing MBA and this helps me a lot :)
Thank you David Harper. I will not forget what you have done for me. I am in your debt.
Excellent tutorial, very clear and didactic, thanks!
Great video! Thank you for a wonderful and easy to follow explanation.
You're welcome! Thank you for watching!
Thank you for this video. It is very helpful and easy to follow.
thank you! now if only my prof taught this to the class before she assigned the assignment
Thank you so much for this! Lifesaver!
@tackleashley I got that a lot too. The cause of error 5 is having both PV & FV negative or positive. One has to be outflow and one has to be input, meaning one negative; one positive.
super helpful
that negative sign is key
thank you
You're welcome! Thank you for watching!
(1+3.35%)^2 gives you the effective annual yield (EAY or EAR), which is fine. But, the B-E (basis) yield of 3.35%*2 is a stated (or nominal) rate. By convention a rate is typically stated; e.g., stated rate of x% with semi-annual/annual/continuous compounding.
2021, it's still helpful
Thank you so much, the explanation was straight forward and easy to follow.
Well, so I figured out maybe I should work this backward. So what I did was I calcualted Bond price using PV functions = PV(Rate,nper,PMT), then from there I calculate the YTM, using your tutorial (RATE functions) then I use the PRICE function to calculate the bond price again. However, the price I calculated using the PRICE function doesn't match the one I used PV function... I truly appreciate your time
Awesome explanation. Thanks
luv the intro dave
LIFE SAVER! THNKS
Thank you David. This is very informative.
Excellent, Thank you
@alexzivo when you enter 950 for PV, be sure to press the +/- button, and then enter it as the PV. If you miss this then you will get the error message.
My excel "rate" function returns a zero rate of return when I use this example. Any Idea what I may be doing wrong. I have repeated it numerous times with what I think is exactly the same formula used in the example.
=Rate(nper,pmt,pv,fv). Number of payments, 20. Payment $30. Present Value -950. Future Value 1000. =0????
very nice you just made my day !!!
Thanks for all your help!!
Hi David!
What is the difference between this function and the YIELD function in excel? They both give you the same result as far as I can tell.
Thanks. Really helped me out big time!
You're welcome! Thank you for watching!
THANK YOU!
Curious though, is it possible to find YTM with the bond equation itself?
Bionic Turtle THANKS FOR THE VIDEO
Great video, your exaplanation was very clear :)
its an interesting solution, but aplying it in some cases wont work. For instance a bond that pays monthly an interest of 0.431% and pays montlhy equal amortizations with a technical price of 90.32 and a market price of 68.6: maturity at jan 2016 will give 3,94 with your solution and the real IRR as today was 17.21%. Am i missing something?
Thank you for the video it really explains the steps needed clearly, there is a question, If I were a company, is PV = Current market price of the bonds = Net Proceeds of the bonds?
I finally got it, thank you for your reply.
hot to deal the guess in the function of excel? I cannot deal with it. thanks
thanks mate, this is a great video! VERY useful
thank you!
You're welcome! Thank you for watching!
Time to maturity from now or all the period?
Hi I am having troubles with finding yield to maturity from following information.... • 550 Debentures were issued with a face value of $1,000 trading at par value of 8.5%...... no time frame given.....cheers, from Australia
How to calculate the total yield I'm supposed to get if I know the ytm?
@Mj4665 did you put in a guess for the program? I got 7.138% following his steps.
Thank you for this great video tutorial, I have this problem that it's killing me because I can't figure out the YTM when I am asked to calculate the bond price as well. I hope you can help me out. In February 2009 Treasury 6s of 2026 offered a semiannually compounded yield of 3.5985%. Calculate (1) YTM and (2) the bond's price...(I have to use the PRICE Excel function to calculate the bond's price)
Excellent! Thank you.
Perfect video, thank you very much!
so easy to understand! thanks man, saved teh day for me haha
How do I figure out the required yield if there is dafault risk ... I mean not sure of the equation to use...
That's the big question amigo
Why do we times 2 instead of using (1+3.35%)^2 for bond equivalent basis?
SOO helpful! THANK YOU!
when i put in the figures in my calc i dont know why i am getting 40.16 as my YTM. Help please
Great
thanks!
this helped, thanks
how do we do it if there are different (given) spot rates?
Hi there, I'm having so much trouble answering this question. Can you please explain how you would use the rate function to solve this equation? The question is you you own a bond at 64.00 in interest annually. The face value is 1000.00 dollars, and the current market price is 1062.50. The bond matures in 11 years. What is the yield to maturity? I'm trying to find the :NPERPMTPVFVTypeGuess This is all being done in Excel? I'm so confused by this question. Please help asap!
yield is given by =RATE(11, 64, -1062.5, 1000) = 5.6228%. With the calculator: 11 N, -1062.5 PV, 64 PMT, 1000 FV and solve with CPT I/Y = 5.6228 (your PV should be negative b/c its an outflow while the PMT and FV are inflows)
How come your link in description can't be reached
Thank you for pointing this out. I've fixed the link. There was an exclamation point at the end, which was causing an error.
thanks
i got 40.1634 on my ba ii plus. what the hell man? I put in the number right. I dont understand
Thank you very much for the video, it was very helpful in solving my first calculation, but my second one doesnt seem to work! im told a bond has 10 years until maturity, a coupon rate of 8% and sells for $1100. I calculated my current yield on the bond as (80/1100 ) * 100 = 7.27% and i next needed to calculate the yeild to maturity. But when i followed your steps in excel my rate answer was #NUM! ... any ideas why ? thank you.
You probably have present value and original value as both positive or negative, one must be different from the other..........
=RATE(nper, pmt, pv, [fv], [type], [guess])
yea what a pain my textbook blows at explaining how to get...
What's a calculator? 😅
IR/PS
Thanks