# Accrued Interest on a bond [closed]

If I were to price a bond on one of its coupon payment days, does that day's coupon payment gets added to the cashflows, if so, do we just discount that by 1 (same day)? ie, C1*df1 + C2*df2 + ... Should C1 be that day's coupon payment, or the next period's coupon payment?

## closed as off-topic by Helin, LocalVolatility, JejeBelfort, phdstudent, olaker♦May 30 '18 at 18:42

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• "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – Helin, LocalVolatility, JejeBelfort, phdstudent, olaker
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• On coupon dates, accrued interest = 0, and $C_1$ is the next coupon payment. – Helin May 30 '18 at 2:41
• That's right. On the coupon date a new coupon cycle begins. The next coupon is (say) 182 days away. Zero days have elapsed in the current (new) coupon cycle and therefore the accrued is 0*coupon/182 = 0. – noob2 May 30 '18 at 14:55
• That coupon hits your cash account. It is gone from the bond price. – Dom May 30 '18 at 22:41