VIEW THE STEP-BY-STEP SOLUTION TO: BOND DURATION Basics Apple Inc. Notes Due 2025 Inputs Rate Convention: 1 = EAR, 0 = APR Annual Coupon Rate
| BOND DURATION | Basics | Annual Percentage Rate | ||||||||
| Apple Inc. | Notes Due 2025 | |||||||||
| Inputs | ||||||||||
| Rate Convention: 1 = EAR, 0 = APR | 0 | |||||||||
| Annual Coupon Rate (CR) | 1.4% | |||||||||
| Yield to Maturity (Annualized) (y) | 0.8% | |||||||||
| Number of Payments / Year (NOP) | 2 | |||||||||
| Number of Periods to Maturity (T) | 8 | |||||||||
| Face Value (FV) | $1,000 | |||||||||
| Outputs | ||||||||||
| Discount Rate / Period (RATE) | 0.4% | |||||||||
| Coupon Payment (PMT) | $7 | |||||||||
| Calculate Bond Duration using the Cash Flows | ||||||||||
| Period | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Time (Years) | 0.0 | 0.5 | 1.0 | 1.5 | 2.0 | 2.5 | 3.0 | 3.5 | 4.0 | Total |
| Cash Flows | $6.88 | $6.88 | $6.88 | $6.88 | $6.88 | $6.88 | $6.88 | $1,006.88 | ||
| Present Value of Cash Flow | $6.85 | $6.82 | $6.79 | $6.76 | $6.73 | $6.71 | $6.68 | $973.98 | $1,021.32 | |
| Weight | 0.7% | 0.7% | 0.7% | 0.7% | 0.7% | 0.7% | 0.7% | 95.4% | 100.0% | |
| Weight * Time | 0.00 | 0.01 | 0.01 | 0.01 | 0.02 | 0.02 | 0.02 | 3.81 | 3.91 | |
| Duration | 3.91 | |||||||||
| Modified Duration | 3.89 | |||||||||
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