![]() ![]() You may refer to the following guide that further explains how to calculate the Bond Duration. The Modified duration is therefore = 1.839 ![]() Once you calculated the Macaulay duration, you'll be able to use the formula below in order to derive the Modified Duration (ModD): MacD The tool will also compute yield to maturity, but see the YTM calculator for a better explanation plus the yield to maturity formula. Enter the bond's trading price, face or par value, time to maturity, and coupon or stated interest rate to compute a current yield. Pay special attention to the last period ( t 4= t n= 2 years) which requires both the coupon payment as well as the final principal repayment. t i = Time in years associated with each coupon paymentįor example, let's suppose that you have a bond, where the:īased on the above information, here are all the components needed in order to calculate the Macaulay Duration:Īdditionally, since the bond matures in 2 years, then for a semiannual bond, you'll have a total of 4 coupon payments (one payment every 6 months), such that:.It uses the purchase price of the property and the current interest rate to tell your home loan. + (m*PV)(1+YTM/m) mt n + (PV)(1+YTM/m) mt n Our bond repayment calculator helps you plan and budget. You can use the following formula to calculate the Macaulay Duration (MacD): (t 1*FV)(C) (t n*FV)(C) (t n*FV) Once you are done entering the values, click on the 'Calculate Bond Duration' button and you'll get the Macaulay Duration of 1.912 and the Modified Duration of 1.839: Formulas to Calculate the Bond Duration Simply enter the following values in the calculator: You can easily calculate the bond duration using the Bond Duration Calculator. (2) What is the bond’s Modified Duration? (1) What is the bond’s Macaulay Duration? Example of using the Bond Duration Calculator The aim of this free Excel template is to enable users to calculate monthly bond repayments, determine the affordability of a home loan, calculate the interest. ![]()
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