In this sum – it seems PV = 104.967, why then was PV = 100 in Sanjay’s lecture?
i didnt quite follow this example – can you please start from the begining. no where did i see the value of 104.967 being used?
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Hello,
104.967 is just used to verify the YTM given on semi annual basis(3.897%).
We are required to calculate YTM on monthly basis.
So,
100+/- PV
[100 + 3.897/2]= 101.95 FV.
This means 100 Rs invested will become 101.95 Rs in 6 months time.
We need to calculate the monthly YTM.. So,
6 N( Here N= months)
CPT I/Y = 0.3221%
Now multiply this by 12 to get monthly YTM i.e. 0.3221 * 12 = 3.87%.
Hope it helps.