The bond transactions automatically calculate the Effective Yield from the Compound Interest field for you with the validate and submit actions when the Schedule Type is Principal in Last Payment w/Compound Interest as follows:
Effective Yield from Compound Interest |
Y = ((1 + (R / N))^N – 1 Where: Y = Effective Yield from Compound Interest R = Per Period Interest Rate N = Number of Payments in a year (derived from the Frequency, so Semi-Annually results in 2 payments, Semi-Monthly has 24 payments, etc.) |