How to Calculate Bond Price on a BA II Plus (Step by Step)

In this tutorial

The five TVM inputs for any bond
Setting P/Y and C/Y for semiannual coupons
Example 1: a premium bond (8% coupon, 6% YTM)
Example 2: a discount bond (5% coupon, 7% YTM)
Quick rule for premium vs discount
Common mistakes and sign conventions

The five inputs of a bond-pricing problem

A fixed-rate bond is just a loan with regular coupons and a final principal repayment. On the TVM worksheet:

N — number of coupon periods (years × payments per year)
I/Y — yield to maturity per period as an annual rate (the calculator divides by C/Y)
PMT — coupon payment per period (annual coupon rate × face value ÷ payments per year)
FV — face value (usually 1,000)
PV — the computed price, the answer

If the problem gives you the price and asks for the yield, that is a YTM calculation — the mirror image covered in the bond YTM tutorial. This page stays on the "price the bond" side of the relationship.

Set P/Y and C/Y first

Almost all exam bonds pay coupons semiannually. The calculator must know that "per period" means twice a year:

Press [2nd] then [P/Y].
Type 2, press [ENTER].
Press ↓ to C/Y, type 2, press [ENTER].
Press [2nd] then [QUIT] to return to the TVM worksheet.

With P/Y = C/Y = 2, entering I/Y = 6 tells the calculator the semiannual rate is 3% per period. Annually paying bonds just use P/Y = C/Y = 1. The calculator basics tutorial explains the TVM worksheet setup in more detail.

Example 1: a premium bond

A 10-year, 8% coupon bond with semiannual coupons, face value $1,000, is priced to yield 6%. Find the price.

Confirm P/Y = C/Y = 2 (steps above).
Press [2nd] then [CLR TVM].
Enter N = 20 (10 years × 2).
Enter I/Y = 6.
Enter PMT = 40 (8% × 1,000 ÷ 2 = 40).
Enter FV = 1000.
Press [CPT] then [PV]. The display shows −1,148.77 (the negative sign is the calculator's cash-flow convention — you "pay" the price to receive the coupons).

The price is $1,148.77, above face value, because the coupon rate (8%) exceeds the yield (6%). Hand check: the price is the present value of 20 semiannual payments of $40 plus $1,000 at 3% per period — the PV of the coupons is about $595.10 and the PV of the principal about $553.68, summing to 1,148.78 (rounding aside).

Example 2: a discount bond

A 6-year, 5% coupon bond with semiannual coupons, face value $1,000, trades at a yield to maturity of 7%. Find the price.

Press [2nd] then [CLR TVM].
Enter N = 12 (6 years × 2).
Enter I/Y = 7.
Enter PMT = 25 (5% × 1,000 ÷ 2 = 25).
Enter FV = 1000.
Press [CPT] then [PV]. The display shows −903.36.

The price is $903.36, below face value, because the coupon rate (5%) is below the required yield (7%). The calculator's 3.5% semiannual discounting is exactly what a bond-pricing formula would do.

The premium / discount / par rule

Coupon rate > YTM → premium (price > 1,000)
Coupon rate = YTM → par (price = 1,000)
Coupon rate < YTM → discount (price < 1,000)

Use the rule as a sanity check before you trust the number on screen. If Example 1 had come out below 1,000, a keystroke was wrong somewhere.

Common mistakes and sign conventions

Using annual inputs for a semiannual bond. Entering N = 10 and I/Y = 6 prices the bond as if coupons were annual — wrong by hundreds of dollars on long maturities.
Forgetting the negative PV. The BA II Plus reports the price as a negative cash outflow. The price itself is the absolute value; convert sign when you write the answer.
Residual TVM values. Always press [2nd] then [CLR TVM] before a new problem; leftover PMT or FV quietly corrupts the result.
PMT sign errors. Coupons must be positive (the calculator already treats PV as the opposite cash flow).
P/Y = C/Y mismatch. Some keystroke sequences set P/Y to 2 but leave C/Y at 1, making the yield compound once a year while coupons pay twice.
Zero-coupon bonds. Just set PMT = 0; only N, I/Y and FV matter.