Good Morning
I have the following example of accrued interest:
Last Coupon Payment date: 7 May 2017
Today date: 15 September 2017
Anual Payments: 2
Convention: 30/360
Anual Rate: 8,75%
Residual Value: 100%
The correct answer is that the accrued interest is = $3,21 (4,375*(132/180)*100)
I introduced:
SDT: 7.0517 (European date)
CPN: 8,75
RDT: 15.0917
RV: 100
Convention: 360
Payments: 2/Y
YLD: Computer Enter
PRI: Computer Enter
Accrued Interest: 1,26389
Where is my mistake?
Why can I arrive to the correct figure of 3,21?
Thanks
RDT is the bond redemption date, not the settlement date. Just as a plug figure, I used 7 May 2018. Using your inputs, I get AI=3.1111111
3.111111 = 0.04375 * (128/180) *100 (131 is the actual day count, 128 is the count using 30/360)
Thanks for your answer
It is so clear and correct your answer, but I wanted to get the answer of the AI, using the Bond function of the BAII Plus Professional
The point is how I get the $3,11 AI, as of the 15 Sept 2017
What data should I introduce to get the correct answer.
Thanks
Set RDT as 7 May 2018 ( or any future coupon date) and SDT as 15 Sept 2017. All your other I puts are correct! 