For example dollar thousand per value of CBA Company bonds with coupon of five percentages. Maturity of these values after five years wills the bond of dollar nine hundred. In aspects of marketing price the current value will be calculated with annual rate of coupon will be thousand dollars because this maturity will be calculated according to the annual interest rate. Which means fifty percentage of value will be increased per year.
For calculating current yield, which consist of current marketing price and interest which is divided by the bond value, total value will be divided by the current price of bond. For example dollar 50 is divided by 5.56, then redemption after five years will be dollar 1000. Capital gain for this maturity will be dollar 100, by measuring maturity offers way to gain capital income.
Total yield should be calculated according to maturity of interest rate and gain capital which is return according to years of bond. Here simple and effective method of calculating maturity will be give in following words. First gather data of the total return and capital gain tabulation. For calculating maturity required total yield minus the total rate with capital gain. For example minus the purchase price of dollar nine hundred with par of dollar thousand, by this you can easily get the discount rate will be dollar hundred. Total discount rate will be divided by the number of years. Result of this calculation will be annualized capital gain. Discount rate of hundred dollar provides the capital gain of dollar 20. Calculate the interest rate by using the annualized capital gain, for getting the annualized return added the both annualized capital gain and yearly interest rate.