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Accrued Interest & Clean Prices

Full price/Dirty Price includes accrued interest. Bond price without accrued interest is clean price.
 
Example

If you want to purchase a $1,000 bond with a 5% coupon, paid semiannually. Today is July 15th. The last coupon was paid June 30th. If the quoted price is $902, how much is the cash or full price?

Solution

Cash Price = Quoted Price + Accrued Interest
= 902 + (1,000)(0.05)(15/365)
= 902 + 2.05 = $904.05





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