Bond Calculator

What this bond calculator does

A bond pays a coupon to its holder and returns the face value at maturity. This calculator finds the bond price when the yield and coupon are known, or finds the annual yield when the price is known. Coupons can be entered as a percentage of face value or as a dollar amount, and they can be paid annually, semiannually, quarterly, or monthly.

The result is a clean price based on the entered yield and maturity. It does not include accrued interest, settlement dates, day-count conventions, taxes, or transaction costs.

How to use this calculator

1. Choose Price to calculate the bond price, or Yield to solve for the yield.
2. Enter the face value.
3. Enter the annual yield or the price, depending on the selected tab.
4. Enter the time to maturity in years.
5. Enter the annual coupon and choose whether it is a percentage or a dollar amount.
6. Choose the coupon frequency and click Calculate.

The default example is a $100 face value bond with a 5% annual coupon, a 6% yield, and three years to maturity. The price is $97.3270.

Bond price formula

For a bond with periodic coupon payments:

Price = C × (1 − (1 + r)^−n) / r + F / (1 + r)^n

C is the coupon payment per period, F is the face value, r is the yield per period, and n is the number of coupon periods. The yield per period is the annual yield divided by the coupon frequency, and n is the years to maturity multiplied by the frequency.

The current yield is the annual coupon divided by the price. It is different from the yield to maturity because it ignores the gain or loss from buying the bond below or above face value.

What the results include

• Price: the present value of the remaining coupon and principal payments.
• Face value: the amount repaid at maturity.
• Annual coupon: the total coupon paid in one year.
• Coupon payment: the amount paid each coupon period.
• Annual yield: the yield used or solved by the calculator.
• Current yield: annual coupon divided by price.
• Cash flow schedule: each coupon, principal repayment, total cash flow, and its present value.

Assumptions and limitations

The calculator assumes a fixed coupon, a fixed yield, and a single maturity date. It does not model accrued interest, settlement dates, call or put features, credit risk, taxes, or day-count conventions. A bond with a price above the maximum supported by a non-negative yield will produce an error.

Frequently asked questions

Why is the bond price below face value?

When the yield is higher than the coupon rate, the bond must trade at a discount so its total return matches the higher market yield. A bond trading above face value has a yield below its coupon rate.

What is the difference between coupon rate and yield?

The coupon rate sets the cash payment as a percentage of face value. The yield is the return implied by the price paid for the bond. The two are equal only when the price equals face value.

How does coupon frequency affect the price?

More frequent coupons pay cash sooner, which usually raises the price slightly for the same annual yield. This calculator converts the annual yield and coupon into the selected period.

Does the calculator include accrued interest?

No. The result is a clean price without accrued interest. A settlement-date calculation that includes accrued interest is outside this version.

Source

References:

• Investor.gov — Bonds
• SEC — Compound Interest

Disclaimer

This calculator is for informational purposes only. It is not investment advice or a bond valuation opinion. Confirm the bond's terms and settlement details with the issuer or broker.