With the example below you can compute the value and yield to maturity of a zero coupon bond. This example uses te bond calculator.
A zero coupon bond is a bond that does not pay any interest. Such a bond is sold for less than its nominal value. Other names are Bullet or Zerobond.
Suppose there is a zero coupon bond on 20090514 with a nominal value of $ 1000. The bond is traded for $ 900 and its maturity date is 20121231. You want to compute its yield to maturity such that you can compare it with other bonds.
To do this enter the following data into the bond calculator:
Field name  Value  Remark 
Nominal interest  0  Zero interest for a zero coupon bond 
Coupon period  12 months  Does not matter, but for other values than 12, 6 or 3 months the calculator produces small rounding differences. 
Date computation  20090514  The date format is YYYYMMDD. 
Maturity date  20121231  
Interest in advance or afterwards  afterwards  Does not matter for a zero coupon bond. 
Nominal value  1000  Amount paid on the maturity date. 
Compute Yield to Maturity or Value  Yield  
Market Value  900  value bond on the computation date. 
Add coupon to market value  Checked  Does not matter for a zero coupon bond. 
Finally click Compute. The computed value will appear in the field Yield to Maturity.
You can compute the value with the same calculator: enter the (desired) yield instead of the market value. The price as usually listed on an exchange will appear in the field Value excluding current or last coupon. The total value of the bond will appear in field Value including current or last coupon.
