- International Monetary Fund
- Published Date:
- April 1996
Therefore, an estimate of the value of a security could be derived by summing the discount (or premium) amortized for each period and adding this amount (plus any non-discount income accrued but not due for payment) to the issue price.
ADt = ((Discount * i) / ((1 + i)n – 1)) * ((1 + i)(t–1)) in which
ADt = amortized discount applicable to period t
n = number of periods in life of security
i = (percentage interest rate prevailing at time of issue) / 100