@@aarushxrajput sorry to hear that buddy! Care to tell me why?

Sure. If you continue watching this video, at about 6:22 I start walking you through another example in which the coupon payments are semi-annual. With MONTHLY coupon payments, change "Coupons Per Year" to 12 and "Number of Time Periods" to "Time to Matuity x 12". Face Value remains the same = $1,000. Hope this helps.

Hi! I disounted the semi-annual coupon payments at the semi-annual yield (or required rate of return). I recommend watching my video on "Bond Prices and How They Are Related to Yield to Maturity" to understand the concept and calculation: kzbin.info/www/bejne/eKKplGafpNisp7Msi=KKF4EVj7opX1E1d8

That’s a great suggestion, thank you! Will create something soon.

@@professorikram More power to you!

😊

Great question. At ANY given point in time, the price of bond depends on coupon payments and the YTM at that time. So if the rates (i.e. YTM) goes down half way, the PV will be calculated using that lower yield, meaning price of the bond will go up. Many times, bond investors invest in a 10-year or 20-year bond, not because they want to hold on to it till maturity, but because they are hoping that in a few years (or months) interest rates (and therefore yields) will go down, causing the price of their bonds to increase - at which point, they can sell their bonds at a profit and move on to other investments. Hope this helps! Thanks for the question.

@ Thanks! Greetings from Colombia 👍

Yes, most US corporate bonds have a face value of $1,000. What you can also do is assume a value of $1,000 and then express the price as a percentage of face value. For instance, if based on a FV of $1,000 the price comes out to $950, you can say the price is 95% of FV. This can standardize things across bonds with different face values.

That’s very kind of you! Really appreciate your support.

That's very nice of you to say. Thank you!

The distinction between current yield and yield to maturity is not based on compoun interest, per se. YTM accounts for changes in the price of the bond over time, while current yield doesn't. In some sense, it is the same as the distintion between dividend yield and stock return: If you buy a stock for $50, and then one year later you get a $5 dividend, AND the price of the stock is $60, then dividend yield is 10% ($5/$50) and capital gains (or return from price appreciation) is 20% [(60-50)/50]. Thus, your TOTAL return from investing in the stock is 30%. In this example, IF the stock were instead a bond, then you could say that 10% is the current yield, whereas the TOTAL return is the Yield to Maturity [This is not technically correct, but I just want you to understand the conceptual distinction)]. Hope this helps. P.S. No YTM is NOT always bigger than current yield. If the price of the stock decreases, you can make a loss and your total return can be less than your dividend yield. Just like that, if the price of bond falls, YTM can be less than current yield.

That's a great question. Unfortunately you won't be able to answer this precisely using the tables. That's because in the PVIFA tables, you will need to look for the factor that corresponds to N = 7 years, and i = 8.16%. You will find N = 7, but you will NOT find interest rate of 8.16%, since tables don't provide interest rates in decimals. So the best you can do is find the factor that corresponds to interest rate of 8%, and know that your "ACTUAL" answer will be a little bit LESS than what you get with that rate. Hope this helps! Thanks for asking.

Good question! Dirty price reflects accrued interest, so it more accurately represents what the investor is going to get. Thus, you should use dirty price and not the clean price when calculating YTM.

That’s unusual. But take the coupon rate, divide my 12 to get the monthly coupon rate, and then multiply that by Face Value to get the monthly coupon payment.

Thank you very much Mr I have calculated using your method and it has been very useful. I will watch your all videos

So glad to hear it! 👍

It’s not. But thanks.

I use the Insert Shapes features to insert Lines. Took a little time the first time around, but once you have one, you can use for practically any time line.

You claim tax deduction on the depreciation. So, as an example, let’s suppose that in the first year of using the van, you generate revenue of $10,000. And let’s further assume that your total cost of operations (eg raw materials, drivers salary etc) was $8,000. So you have a profit of $2,000. If your tax rate is, say, 30%, you would pay 30% of $2,000 = $600 in taxes. HOWEVER, if the vans depreciation for the year is $1,000, then you will say “That’s my cost of operating the van as well”, which means you will deduct this from $2.000 and instead show (operating) profit of $1,000 ($2,000 - $1,000). Thus you will pay taxes of only $300 (30% of $1,000). In other depreciation expense allowed you to save $300 ($600 -$300) in taxes. Hope that helps. Appreciate your question! And happy to answer any other questions you may have.

Thank you so much! 🙂

You're welcome!

Thanks for the sub! 🙏