Different spot rates

CFA Level I Fixed Income
#1

Hi all,

I have a question regarding discounting method using different spot rates. I am interested if there is an easier/faster way to discount with different spot rates? I feel like there must be, I am just not seeing it.

e.g. lets say we have different spot rates for n=3, I am not able to use TVM function and calculating with standard formula takes some time: PV = PMT/(1+r1) + PMT/(1+r2)^2 + (PMT+FV)/(1+r3)^3.

Thanks!

#2

You can still use the TVM worksheet to get the PVs of the individual payments and save them in memory. Just add up the values in memory when you’re done to get the overall sum.

1 Like
#3

I must admit I was not aware of saving values on the calculator - I’ll see how it is done. Thanks for reaching out.

#4

STO key lets you store up to 10 values in memory using the number keys

100 STO 1 (store the value 100 in memory register 1)
RCL 1 (recall the value stored in memory register 1) which will return 100! :nerd_face: