Example 5

Example 5: The present value of a simple bond

We want to calculate the cash flow and the present value of a bond using the termstructure function found in example 4. The bond has a principal of 112 and a coupon rate of 12 percent. Coupons are paid semiannually and there are 5 settlements to maturity. This is what we will end up with.
Load the Bond.m package of Derivatives Expert through the Mathematica Add-On Libraries window.
Select the cell C21 as in the picture above, and using the same worksheet as in example 4.
Find and select the PresentValue function through the Mathematica Function Wizard, and in step 2 of the wizard select the third prototype of the PresentValue function. Enter "Serial[ 112, 12, 2, 5]" as the object, and "termstructure" as the tsfunction (everything without the qoutes when working within the wizard).
Click on Enter and the table C21:F26 will be calculated and written. The colors etc. are changed using standard Excel formatting.