Bond CalculatorFree online financial calculator — instant results, no sign-up
Price a bond from its coupon, yield and maturity.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Bond Calculator
This calculator computes the theoretical market price, current yield, and trading status of a fixed-rate bond based on its par value, coupon rate, yield to maturity, and remaining lifespan. Investors use it to evaluate whether a bond is trading at a discount or premium relative to prevailing market yields.
- Face value
- The par value of the bond repaid at maturity, entered in dollars (typically $1,000).
- Coupon rate
- The stated annual interest rate paid by the bond issuer, expressed as a percentage.
- Yield to maturity
- The required annual market interest rate or expected rate of return, expressed as a percentage.
- Years to maturity
- The number of years remaining until the bond principal is repaid.
- Payments
- The coupon payment frequency per year, selectable as either Semiannual (2 payments per year) or Annual (1 payment per year).
Formula and method
Price = c × [1 − (1 + y)^(-N)] / y + Face × (1 + y)^(-N) Current Yield = (Annual Coupon / Price) × 100
- PriceTheoretical present value of the bond
- FaceFace value (par value) due at maturity
- kPayment frequency per year (1 for Annual, 2 for Semiannual)
- cPeriodic coupon payment: (Face × Coupon Rate / 100) / k
- yPeriodic discount rate: (Yield to Maturity / 100) / k
- NTotal number of payment periods: Years × k
- Current YieldAnnual coupon cash flow divided by the computed bond price, as a percentage
The calculator converts annual rates and maturities into periodic equivalents according to the chosen payment frequency. It sums the present value of the stream of coupon payments (an ordinary annuity) and the present value of the face value at maturity. The resulting price is compared to the face value to label it as a premium or discount, and current yield is computed by dividing annual coupon income by the calculated price.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Face value1000 $
- Coupon rate5 %
- Yield to maturity6 %
- Years to maturity10
- PaymentsSemiannual
Results
- Bond price$925.61
- Current yield5.4%
- Premium / discountDiscount
How to use the Bond Calculator
- 1Determine the periodic payment frequency k (1 for Annual, 2 for Semiannual) and calculate total periods N = Years × k.
- 2Calculate the periodic coupon payment c and periodic discount rate y by dividing the respective annual percentages by k.
- 3Discount the annuity of periodic coupon payments and the single face value payment back to present value to obtain the bond price.
- 4Divide total annual coupon payments by the calculated bond price to determine current yield, and check if price exceeds face value.
Reading your result
A bond price below face value indicates the bond trades at a discount because its coupon rate is lower than the prevailing yield to maturity. When the yield to maturity is lower than the coupon rate, the price rises above par value (trading at a premium). Current yield reflects the immediate cash return on the purchase price rather than total return through maturity.
Limitations
The calculation assumes a clean price with payment periods aligned exactly to coupon dates, ignoring accrued interest between coupon cycles. It also assumes no credit default risk, constant reinvestment rates, and that the bond will not be called before its stated maturity date.
Common questions
Why is the bond price lower than the face value when YTM exceeds the coupon rate?+
When new or prevailing market rates (YTM) are higher than the bond's fixed coupon rate, existing bonds must drop in price so their overall return matches the higher prevailing market rate.
What is the difference between yield to maturity and current yield?+
Current yield measures only annual interest payments divided by the bond's current price. Yield to maturity accounts for coupon payments, the time value of money, and any capital gain or loss realized when holding the bond until it matures at par.
Does this formula calculate dirty price or clean price?+
This formula assumes whole coupon periods from the settlement date, effectively calculating a clean price that coincides exactly with a coupon payment date without fractional accrued interest.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.