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how to calculate face value of a bond

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The present value (i.e. Face Value: A Bond has a par value which is given on the face of the bond. Annual Coupon Rate is the yield of the bond as of its issue date. This article has been viewed 608,368 times. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. The calculator, uses the following formulas to compute the present value of a bond: Present Value Paid at Maturity = Face Value / (Market Rate/ 100) ^ Number Payments, Present Value of Interest Payments = Payment Value * (1 - (Market Rate / 100) ^ -Number Payments) / Number Payments), Present Value of Bond = Present Value Paid at Maturity + Present Value of Interest Payments. Annual Market Rate is the current market rate. Further, ASD Inc. will be able to raise fund worth $3.77 million. But if you want to know the exact formula for calculating bond valuation then please check out the "Formula" box above.
For example, if your bond’s face value is 500,000 and its discount is 36,798, the rate will be 7.36 percent. If return to expenses is constantly poor, avoid. 1000/-. That factor is .822. Add together the two present value figures to arrive at the present value of the bond. If it is less than the coupon rate, the present value is greater than the face value. If the two rates are the same, the present value is the same is the face value.

The YTM is denoted by r. Step 5: Next, determine the number of coupon payments to be paid during a year, which is denoted by n. To put it simply, it is the number of compounding per year. Thank you. Step 2: Calculate Present Value of the Face Value of the Bond. To calculate the value of a corporate bond, the following data must be known: coupon rate, face value and bond term, or practically years to maturity. To find out what the $100 payment is worth today, you would compute the present value of $100. The present value of your bond is (present value of all interest payments) + (present value of principal repayment at maturity). Accounting for Investments Corporate Finance GAAP Guidebook, Accounting BestsellersAccountants' GuidebookAccounting Controls Guidebook Accounting for Casinos & Gaming Accounting for InventoryAccounting for ManagersAccounting Information Systems Accounting Procedures Guidebook Agricultural Accounting Bookkeeping GuidebookBudgetingCFO GuidebookClosing the Books Construction AccountingCost Accounting FundamentalsCost Accounting TextbookCredit & Collection GuidebookFixed Asset AccountingFraud ExaminationGAAP GuidebookGovernmental Accounting Health Care Accounting Hospitality Accounting IFRS GuidebookLean Accounting Guidebook New Controller GuidebookNonprofit Accounting Oil & Gas Accounting Payables ManagementPayroll ManagementPublic Company Accounting Real Estate Accounting, Finance BestsellersBusiness Ratios GuidebookCorporate Cash ManagementCorporate FinanceCost ManagementEnterprise Risk ManagementFinancial AnalysisInterpretation of FinancialsInvestor Relations GuidebookMBA GuidebookMergers & AcquisitionsTreasurer's Guidebook, Operations BestsellersConstraint ManagementHuman Resources GuidebookInventory Management New Manager Guidebook Project ManagementPurchasing Guidebook, How to calculate the present value of a bond.

If you use a table, you will locate the present value factor for a 4% discount rate for 5 years. Market interest rate represents the return rate similar bonds sold on the market can generate.

The investor computes the present value of the interest payments and the present value of the principal amount received at maturity. It is simple and easy.

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