![]() ![]() To calculate the amortization for the second period, you will subtract $66.25 from $10,500 to arrive at $10,433.75 as your new starting number: Then, use these figures to help you with the following amortization calculation for period one: ![]() Divide your coupon rate in half: 5%/2 = 2.5%.Here's how you would prepare to calculate amortization for the first accrual period: Let's say you pay $10,500 for a bond with a maturity value of $10,000 that matures in five years, a 5% coupon rate and a yield to maturity of 3.5%, with interest payments every six months. If you prefer to make your own premium amortization table, keep in mind that you will need to make new calculations for each accrual period. In order to use these tools, you will need to gather the following information: If math is not your strong suit, consider using a bond premium amortization calculator or spreadsheet to automatically do the calculations for you. The constant-yield method of amortization is the method currently prescribed by the IRS for tax returns, and it is more complicated to figure. ![]()
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