Treasury bond interest can be calculated in the following ways:?

(1) General interest

General interest is a kind of fixed interest, which refers to the amount paid when the government bond is issued. Interest is clearly defined. Calculation methods include simple interest and compound interest. If P represents the principal amount, i represents the interest rate of the government bond, I represents the interest, s represents the sum of principal and interest or the repayment amount, and n represents the repayment period, then:

The amount of interest calculated according to the simple interest method I=P· i·n;

Debt repayment amount S=P(1+i·n);

Debt repayment amount calculated based on compound interest S=P(1 + i)n;< /p>

The amount of interest I=S—P=P·[(1 + i)]n -1]

Since the compound interest method implements "interest compounding", that is, the interest generated on the principal Interest is also calculated. Therefore, under the same interest rate conditions, the interest calculated is greater than the interest calculated by the simple interest method.

(2) Held interest

Held interest is generally a kind of floating interest, which means that under inflation, in order to increase investors' interest in subscribing to government bonds, the bond interest will follow the inflation rate An interest payment method in which the indicator fluctuates up and down and maintains its value.

Inflation has become a "disease" that often appears in the economic development process of countries around the world and is difficult to cure. Continuous inflation will inevitably reduce the investment value of capital.

Under inflationary conditions, investors will inevitably require government bond investments to compensate for their inflation risk losses. In this case, the interest on treasury bonds issued by the government consists of two parts:

Treasury bond interest = pure coupon interest + inflation compensation

That is: treasury bond interest = number of interest accrual years Coupon rate + average inflation rate)

(3) Interest discount or discount

Interest discount or discount means that the national debt is issued at a price lower than the face value and will be repaid at the face value upon maturity. , and the difference between the face amount and the issue price is the interest.

(4) Interest-cut or attached interest

The interest-cut or attached interest payment method refers to a method in which the government pays interest every year (or every six months) before the national debt matures. Way. The interest rate cutting method is conducive to equalizing the interest payments on national debt and reducing the financial pressure during the peak period of principal and interest repayments.

Extended information:

Types

(1) Based on the form of national debt as a standard, national debt can be divided into national borrowing and bond issuance. State borrowing is the most primitive form of debt. Modern countries mainly adopt this form when borrowing foreign debt from foreign governments, banks, international financial organizations, etc. and borrowing from their own central banks. But borrowing can usually only be made if the number of debtors is small. In the case where there are many debtor entities, the form of issuing bonds should be adopted.

(2) Based on the region where national debt is issued, national debt can be divided into domestic debt and external debt. Domestic debt is borrowings and bonds issued within the country. Foreign debt refers to borrowings from other governments, banks, international financial organizations and bonds issued abroad.

(3) Based on the liquidity of the bond, treasury bonds can be divided into transferable treasury bonds and non-transferable treasury bonds. The state's borrowings are usually not transferable, and only bonds have the possibility of being listed and transferred. Whether a bond can be marketed and transferred, that is, whether it is liquid, is an important factor in determining the attractiveness of a bond.

(4) Based on the repayment period of treasury bonds, treasury bonds can be divided into long, medium and short-term treasury bonds. Generally, treasury bonds with a repayment period of less than one year are called short-term treasury bonds, those with a repayment period of more than 10 years are called long-term treasury bonds, and those in between are called medium-term treasury bonds.

(5) Based on the interest payment method of treasury bonds, treasury bonds can be divided into interest-paying treasury bonds and zero-coupon treasury bonds. Interest-paying treasury bonds adopt the method of interest payment in installments. Generally, long-term treasury bonds are mostly interest-paying treasury bonds.

Zero-coupon public bonds are also called non-coupon government bonds. In terms of interest payment method, they adopt discount method or one-time repayment of principal and interest upon maturity. Most medium- and short-term government bonds fall into this category.

(6) Based on whether the treasury bonds are registered or not, treasury bonds can be divided into registered treasury bonds and unregistered treasury bonds. For registered treasury bonds, the name of the bond owner is written on the bond, and transfer registration is required when the creditor's rights are transferred. This form is generally used for non-transferable treasury bonds.

The name of the bearer treasury bond is not written on the bond, and the bond holder is the owner. It is easier to transfer. Generally, transferable treasury bonds take this form.

(7) Other categories.

Based on whether treasury bonds have relevant certificates, they can be divided into certificate-type treasury bonds and book-entry treasury bonds; based on the criteria for the subscription objects of treasury bonds, they can be divided into treasury bonds subscribed by residents, treasury bonds subscribed by institutions, etc.

Based on whether there is compulsion in the treasury bond subscription process, they can be divided into mandatory treasury bonds and free treasury bonds; based on the ultimate use of treasury bond funds, they can be divided into constructive treasury bonds and deficit treasury bonds.

Baidu Encyclopedia-Treasury Bond Interest