Price of a Zero Coupon Bond using the BAIIPlus

This video demonstrates calculating the price of a zero coupon bond using the BAII Plus calculator.

[@TheTuneoftheweek]

Thank you, Professor! I am just preparing for my CFA Level 1 Exam. You helped me.

[@lsw278]

That's great! Glad I could help and good luck on the Exam

[@lsw278]

I worked a different problem using the same process as above and it works. I might reset your calculator to see if you have something hung up in memory. Since it is semi-annual, we take the I/Y (Interest rate) and divide it by 2. Then double the number of payments. This gets you to semi-annual payments at the semi-annual rate. Be sure you are entering the $1,000 FV as a negative and put in 0 for PMT. So, they keystrokes are N = 28, I/Y = 2.80 PMT = 0 and FV = -1000 then [CPT] PV and you should get what I have. Also, double check that your P/Y is set to 1 (you may have changed that for another problem - this is located at the 2nd I/Y key. If it's still not working, email me at [e-mail] and let's see if we can figure it out. P.S. Good to hear from you :)

[@gavinc.6357]

THANK YOU for this comment. I am taking a MBA Corporate Finance Course and got absolutely destroyed on my last two exams, and I had absolutely no idea why. It turns out my P/Y somehow got changed to 12 instead of 1. I might have to repeat the course now (all because of a calculator problem), but at least I know why none of my calculations made any sense!

[@lsw278]

@@gavinc.6357 I'm so sorry that you had that issue. The calculator is a great tool, but it's not bulletproof. (LOL). I have made more than 1 error because I had a setting incorrect. Hang in there and I am glad that the video and my comment helped.

[@nicsegura5622]

Super helpful, thanks!

[@lsw278]

So glad it was helpful!

[@jeremyandruthbulthouse8971]

Ms. Williams, I have tried about 10 times to get the answer you are getting and I keep on getting 894.44. What is up with my BA Plus ii calculator? Is it malfunctioning? Do I need to get a new one? I really need to get the hang of this. I am studying to take my CPCU 540 exam in October.

[@lsw278]

Let me look at this video and I’ll get right back to you.

[@carlquesinberry1501]

I would CLEAR both my regular calculation functions and CF functions and retry the calculation

[@dianabartolac1807]

I was getting a different answer too, but once I reset my calculator it was working fine. Try hitting 2nd and then the +|- sign which says “reset” above it, then hit Enter. Next, hit 2nd CPT, and then 2nd FV and you should be good to go.

[@lukebrooks5345]

Why do we make the par value negative?

[@lsw278]

We have to make either the PV or FV a negative, so it's easier to make the Par Value of the Bond a negative so that we don't get an Error on the BAII