10 0.00 I Bond Calculator

What is a 10 0.00 i bond?

A 10 0.00 i bond is a fixed-income security that pays a 10% annual coupon rate and has a 0.00% yield to maturity. The notation "10 0.00 i" follows the bond market convention where:

• 10 represents the annual coupon rate (10%)
• 0.00 represents the yield to maturity (0.00%)
• The "i" indicates the bond is priced at par value

Bonds priced at par value mean the current price equals the face value. This occurs when the yield to maturity equals the coupon rate. For a 10 0.00 i bond, both the coupon rate and yield to maturity are 10%, so the bond is trading at par.

How to calculate bond price

The price of a bond is determined by the present value of its future cash flows. For a bond with a 10% coupon rate and 0.00% yield to maturity, the calculation is straightforward since the bond is trading at par.

If the yield to maturity were different from the coupon rate, you would use the bond pricing formula:

For a 10 0.00 i bond, the price equals the face value because the present value of all cash flows equals the face value.

How to calculate bond yield

The yield to maturity (YTM) is the internal rate of return on a bond, considering all cash flows. For a 10 0.00 i bond, the YTM equals the coupon rate (10%) because the bond is trading at par.

If the bond were trading at a discount or premium, you would use the YTM formula:

This requires iterative calculation or financial functions to solve for YTM.

Example calculation

Let's calculate the price and yield for a 10 0.00 i bond with a face value of $1,000 and 10-year maturity.

Bond Price Calculation

Since the bond is trading at par (yield to maturity = coupon rate), the price equals the face value.

Yield to Maturity Calculation

The YTM equals the coupon rate when the bond is trading at par.

This means the bond is currently yielding 10% annually, which matches its coupon rate.