Approximate Macaulay Duration Calculator

✖Approximate Modified Duration is a measure of a bond's price sensitivity to changes in interest rates, reflecting how much the bond's price will change for a 1% change in yield.ⓘ Approximate Modified Duration [AMD]			+10% -10%
✖Rate of Interest is the annual interest payment made by the bond issuer to the bondholder, expressed as a percentage of the bond's face value.ⓘ Rate of Interest [R]			+10% -10%

✖Approximate Macaulay Duration is a measure of the weighted average time until a bond's cash flows are received.ⓘ Approximate Macaulay Duration [AMYD]

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Formula

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Approximate Macaulay Duration

Formula

`"AMYD" = "AMD"*(1+"R")`

Example

`"4.445"="1.27"*(1+"2.50")`

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Approximate Macaulay Duration Solution

STEP 0: Pre-Calculation Summary

Formula Used

Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest)
AMYD = AMD*(1+R)
This formula uses 3 Variables

Variables Used

Approximate Macaulay Duration - Approximate Macaulay Duration is a measure of the weighted average time until a bond's cash flows are received.
Approximate Modified Duration - Approximate Modified Duration is a measure of a bond's price sensitivity to changes in interest rates, reflecting how much the bond's price will change for a 1% change in yield.
Rate of Interest - Rate of Interest is the annual interest payment made by the bond issuer to the bondholder, expressed as a percentage of the bond's face value.

STEP 1: Convert Input(s) to Base Unit

Approximate Modified Duration: 1.27 --> No Conversion Required
Rate of Interest: 2.5 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

AMYD = AMD*(1+R) --> 1.27*(1+2.5)

Evaluating ... ...

AMYD = 4.445

STEP 3: Convert Result to Output's Unit

4.445 --> No Conversion Required

FINAL ANSWER

4.445 <-- Approximate Macaulay Duration

(Calculation completed in 00.004 seconds)

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IGNOU (IGNOU), India

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Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< 18 Strategic Financial Management Calculators

Money Market Discount Rate

Go Money Market Discount Rate = (Year/Days of Maturity)*(Face Value of Money Market Instrument-Present Value of Money Market Instrument)/Face Value of Money Market Instrument

Effective Convexity

Go Effective Convexity = (Price of Bond When Yield is Decreased+Price of Bond When Yield is Increased-(2*Initial Price of Bond))/((Change in Curve)^2*Initial Price of Bond)

Add on Rate

Go Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest))

Change in Price of Full Bond

Go Percentage Change in Price of Bond = (-Annual Modified Duration*Change in Yield)+(1/2*Annual Convexity*(Change in Yield)^2)

Value of Right using New Shares

Go Value of Right = Number of New Shares*(Market Price-Issue Price of New Share)/Total Number of All Shares

Single Month Mortality

Go Single Month Morality = Prepayment for a Month/(Beginning Mortgage Balance for Month-Scheduled Principal Repayment for Month)

Value of Right

Go Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share

Cost of Equity

Go Cost of Equity = ((Dividend in Next Period/Current Share Price)+(Dividend Growth Rate*0.01))*100

Unlevered Beta

Go Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity)))

Levered Beta

Go Levered Beta = Unlevered Beta*(1+((1-Tax Rate)*(Debt/Equity)))

Price Value of Basis Point

Go Price Value of Basis Point = (Price of Bond When Yield is Decreased-Price of Bond When Yield is Increased)/2

Price of Bond

Go Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period

Approximate Macaulay Duration

Go Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest)

Conversion Parity Price

Go Conversion Parity Price = Value of Convertible Security/Conversion Ratio

Share Exchange Ratio

Go Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price

Earnings Yield

Go Earnings Yield = (Earnings per Share/Market Price per Share)*100

Dividend Rate

Go Dividend Rate = (Dividend per Share/Current Share Price)*100

Earnings Yield using PE Ratio

Go Earnings Yield = (1/Price-Earnings (PE) Ratio)*100

Approximate Macaulay Duration Formula

Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest)
AMYD = AMD*(1+R)

What is Approximate Macaulay Duration ?

Approximate Macaulay Duration is an approximation that is particularly useful for making rough calculations when detailed bond information is not available or when a quick estimate is needed. Approximate Macaulay Duration provides a quick and practical way to estimate the average time it takes for a bond's cash flows to be received, weighted by their present values. This approximation is particularly useful for quick assessments and comparisons between bonds without needing a detailed cash flow analysis. Macaulay Duration is a measure of the weighted average time until a bond's cash flows (both interest payments and the principal repayment) are received. It's expressed in years and is named after Frederick Macaulay, who introduced the concept. The duration takes into account the present value of all cash flows, helping investors understand the sensitivity of a bond's price to changes in interest rates. The concept of Macaulay Duration revolves around the idea of the time-weighted present value of cash flows.

How to Calculate Approximate Macaulay Duration?

Approximate Macaulay Duration calculator uses Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest) to calculate the Approximate Macaulay Duration, Approximate Macaulay Duration provides a quick estimate of the duration of a bond without the need for detailed cash flow analysis and discounting. Approximate Macaulay Duration is denoted by AMYD symbol.

How to calculate Approximate Macaulay Duration using this online calculator? To use this online calculator for Approximate Macaulay Duration, enter Approximate Modified Duration (AMD) & Rate of Interest (R) and hit the calculate button. Here is how the Approximate Macaulay Duration calculation can be explained with given input values -> 4.445 = 1.27*(1+2.5).

FAQ

What is Approximate Macaulay Duration?

Approximate Macaulay Duration provides a quick estimate of the duration of a bond without the need for detailed cash flow analysis and discounting and is represented as AMYD = AMD*(1+R) or Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest). Approximate Modified Duration is a measure of a bond's price sensitivity to changes in interest rates, reflecting how much the bond's price will change for a 1% change in yield & Rate of Interest is the annual interest payment made by the bond issuer to the bondholder, expressed as a percentage of the bond's face value.

How to calculate Approximate Macaulay Duration?

Approximate Macaulay Duration provides a quick estimate of the duration of a bond without the need for detailed cash flow analysis and discounting is calculated using Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest). To calculate Approximate Macaulay Duration, you need Approximate Modified Duration (AMD) & Rate of Interest (R). With our tool, you need to enter the respective value for Approximate Modified Duration & Rate of Interest and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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