Bond Price Calculator

This calculator values a plain fixed-rate bond: enter the face (par) value, the coupon rate printed on the bond, the yield the market currently demands for similar bonds, the years left to maturity and how often coupons are paid. It returns the fair price, how far that sits above or below par, the size of each coupon payment, total coupons to maturity and the current yield.

Use it to check a quote from a broker, see how much a bond you hold would fetch if rates have moved, or understand why bond funds fall when interest rates rise. It assumes the bond is priced on a coupon date (no accrued interest), pays every coupon, and is not called early.

To go the other way and find the yield from a price, use the yield to maturity calculator. The discounting here is the same as in the present value calculator, applied to each cash flow.

This is the standard discounted cash flow valuation taught in fixed-income texts and used for US Treasury and corporate bond pricing (Treasuries and most US corporates pay semi-annually). The result is the clean price on a coupon date; between coupon dates a buyer also pays accrued interest, giving the dirty price.

It does not apply to callable bonds near their call date, floating-rate notes, inflation-linked bonds such as TIPS, or bonds in default. Set the coupon to 0 to price a zero-coupon bond.

A bond's coupons are fixed when it is issued. If market yields rise, new bonds pay more, so an existing bond only sells if its price falls far enough that a buyer earns the new, higher yield. If yields fall, the existing bond's coupons look generous and its price rises.

The size of the move depends mainly on time to maturity and coupon size. Long bonds and low-coupon bonds move most, because more of their value sits in cash flows far in the future. That sensitivity is measured by duration: a bond with a duration of 7 loses roughly 7% of its price for a 1 percentage point rise in yields.

The coupon payment is face value × coupon rate ÷ payments per year. A $1,000 bond with a 4% coupon pays $40 a year: $20 twice a year if semi-annual, or $10 four times a year if quarterly. The coupon payment never changes with the market price.

Current yield is the annual coupon divided by the price you pay. It is quick, but it ignores the gain or loss you lock in by buying below or above par, so for a full picture of return use yield to maturity.

Use the yield on bonds with a similar maturity and credit quality, not the coupon rate. For US Treasuries, the Treasury yield curve for the matching maturity is the benchmark. For corporate or municipal bonds, add a credit spread: lower-rated issuers must offer higher yields, which lowers the price you should pay for the same coupon.

If you already know the price and want the return instead, a bond's yield is simply the internal rate of return of its cash flows: the price paid today, then each coupon and the face value.