Question

How do you calculate the dirty price of a bond after the settlement date (what's the...

How do you calculate the dirty price of a bond after the settlement date (what's the formula)?

Homework Answers

Answer #1

Even for after the settlement date, the dirty price of a bond is equal to the clean price of the bond + accrued interest.

Accrued interest is equal to the coupon payment accrued until the settlement date from the last coupon paid date.

Accrued Interest = Coupon * Number of days since the last coupon payment/Total days count in a period.

Another effective way to calculate the dirty price or accrued interest is to use the financial calculator, simply key in all the data and it will give you all the values.

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