CalcArcade.

Bond Calculator

Enter the face value, the coupon rate, the years to maturity and how often it pays. Then give a market yield to find the price, or a price to find the yield.

Your numbers

Result

Estimate for information only, not professional advice. Last reviewed .

How we calculate it

A bond pays a coupon every period and its face value at the end. The price is the sum of all those payments discounted at the yield per period y: Price = Coupon × (1 − (1 + y)^−N) ÷ y + Face × (1 + y)^−N, where N is the number of coupons and the coupon is the face value × the coupon rate ÷ the coupons per year. For the yield, the calculator finds the y that gives your price, by repeated halving.

For example, a 1,000 bond with a 5% coupon, 10 years left, paid twice a year and priced to yield 6% is worth 925.61. If the yield equals the coupon, the price is exactly the face value. Yields are shown as nominal yearly rates (the yield per period times the coupons per year).

Assumptions and limits

  • The price is for a coupon payment date, so there is no accrued interest. A price on another day adds the accrued interest.
  • Years times coupons per year must be a whole number of coupons, for example 2.5 years with 2 coupons a year is 5 coupons.
  • There are no taxes, fees or default risk. The bond is assumed to be held to maturity and paid in full.

Frequently asked questions

Why does a bond price fall when yields rise?

The coupons are fixed. When the market pays a higher yield, those fixed payments are worth less today, so the price drops until the yield on the price matches the market.

What is the difference between current yield and yield to maturity?

Current yield is the yearly coupon divided by the price. Yield to maturity also counts the gain or loss between the price and the face value at maturity, so it is the full return if you hold to the end.

What is a premium or a discount bond?

A bond priced above its face value trades at a premium, which happens when its coupon is higher than the market yield. Below face value it is at a discount.

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Worked example (a fixed example using the starting numbers, it does not change as you type)

Inputs: Face value = 1000; Coupon rate per year (%) = 5; Years to maturity = 10; Coupons per year = Twice a year (semiannual); Find the = Price, from the yield; Market yield per year (%) = 6.

  • Bond price $925.61
  • Current yield 5.4%
  • Price status Discount (below face value)
  • Total coupon payments $500.00
  • Number of coupons 20

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Last reviewed: . Formulas and assumptions are described on our methodology page. For information only; not professional advice.