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Be sure to check out the hobbyist sections of our site. We're in the process of rolling out sections on photography and everyday gadgets. We don't focus on the cutting edge, new technologies -- we're focusing on how to use new technologies in everyday life.
Gadgets
every day uses for new and old technologies.
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Bond Duration
Bonds with equal maturities but different coupon rates can be compared on the basis of their respective interest payments. For a given class of bonds, bonds with lower coupons are typically more volatile than those with higher coupons. One method for comparing bonds is the yield to maturity. The bond duration comparison compares the sensitivity to changes in interest rates.
Bond Duration is the average amount of time that it takes to receive the interest and the principal. The duration is a complicated formula (at least it looks that way) that calculates the weighted average of the cash flows (interest and principal payments) of the bond, discounted to the present time.
Who uses the bond duration calculation? This calculation is typically used by pension fund managers when they are planning for cash flows that will be required over time. When using this calculation, you can determine if you will have enough to cover future cash flows.
For those of you who want to know the formula for the index;
Duration = [(1 + a) / a] - [(1 + a) + yrs * (i - a)] / [i * [(1 + a) ^yrs - 1] + i]
Where:
- a = yield to maturity
- i = annual interest (coupon)
- yrs = the number of years to maturity
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If you're looking for information on the the FinPlan Divorce Planner (from the other FinPlan company), please continue on to http://www.divorceplanner.com.
Note - FinPlan.com does not offer any information regarding this program nor does it have any relationship with the company offering the software. This link is provided as a service only.
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FinPlan.com offers several online tools and calculators as well as some software programs from FinPlan, Inc. FinPlan started developing software in the 1980s developing 10 programs covering several personal finance topics.
Family Retirement Planner
The FinPlan Family Retirement Planner provides an excellent high-level retirement planning model to help you determine your retirement planning needs which will allow you to develop a strategy to get there.
Financial Toolkit
The FinPlan Financial Toolkit provides a variety of financial tools designed to help you answer many questions on personal finance.
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