In the bonds premium and bonds discount worksheets

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Unformatted text preview: the end of the period).” As with the “PV” (Present Value) formula, interest rates and periods must be stated in the same terms. The appearance of the dialog box is very similar. Like the “PV” (Present Value) formula this single formula with various inputs will provide the “FV” (Future Value) of a single sum or a series of payments - an annuity. It will accept payments made at the beginning or the end of the period. As with the “PV” (Present Value) formula, the “FV” (Future Value) formula will produce the value for the sum of $1. This value will be kept within Excel to a greater number of significant digits than your textbook’s tables. This may cause a slight difference between Excel generated “PV” (Present Values) and “FV” (Future values) but the differences will not be material in nature – pennies on thousands of dollars. Bond Table Excel will handle the task of a bond issuance, determination of present value of the issue and both effective and straight-line amortization of the premium or discount through numerous formulas including present value. The application of these formulas on the “Bonds – Premium” and “Bonds – Discount” worksheets of the “Bonds Table” data file closely matches the structure of the bond table in your textbook. As stated in the textbook, the essential pieces of information for a bond issuance are face interest rate, market interest rate, periodicity of bond interest payments, life of the bond, number of bonds issued and the face value of each bond as well as whether the amortization will be effective or straightline amortization. All of the worksheets in the “Bond Table” data file contain this information in the upper portion and these values are used throughout the worksheets. By using the “PV” formula of Excel you can determine the present value of the principle and the present value of the interest payments. This is done on rows 11 and 12 of each worksheet. The sum of these two values is the present value of the issuance, shown on row 13. The difference between the present value of the issuance and the face value of the issuance, (or t...
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This note was uploaded on 09/19/2010 for the course ACCT 220 taught by Professor Ullmann during the Fall '10 term at University of Nebraska Kearney.

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