Calculate the price of a bond from its face value, coupon, maturity and market yield, with current yield. Enter your values; the result updates as you type, with the method shown below.
About this calculator
A bond pays a fixed coupon and repays its face value at maturity. Its price moves when market rates change: if rates rise above the coupon, the price falls below face value, and the reverse.
Enter the face value, the coupon rate, the market yield, the years to maturity and the payment frequency. The calculator shows the price, the price as a percentage of face value, the current yield and the coupon per payment.
When to use it
- Valuing a bond before buying it.
- Understanding why bond prices fall when rates rise.
- Comparing a bond with a savings account.
- Studying fixed income.
How to read the result
Price = sum of discounted coupons + discounted face value. A 4% bond when the market yields 5% trades below 100%.
The longer the maturity, the more the price reacts to a change in rates.
Mistakes to avoid
- Confusing coupon rate and yield.
- Forgetting accrued interest when buying between coupons.
- Ignoring the issuer’s credit risk.
Formula
Price = Σ coupon / (1 + y)^t + face / (1 + y)^n
Worked example
1,000 bond, 4% coupon, 10 years, market yield 5%: price 922.05.
Frequently asked questions
Why do bond prices fall when rates rise?
New bonds pay more, so older bonds must be cheaper to compete.
What is the current yield?
Annual coupon divided by the price.
Why do bond prices fall when rates rise?
Because new bonds pay more, so older ones must be cheaper to compete.
What is the current yield?
Yearly coupon divided by price.
What if I hold to maturity?
You receive the face value, whatever the price did in between, if the issuer does not default.
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Results are estimates for information only. Check important figures with a professional.