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Bond Price Calculator

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Your Results

At a 6% yield, this bond is worth about $957.35 today. That is $42.65 below its $1,000.00 face value, so it sells at a discount, because its 5% coupon is lower than the yield. The buyer receives 10 semi-annual payments of $25.00, then $1,000.00 at the end.

$957.35
Bond price: $42.65 below face value (discount)
$25.00
Coupon per Period
$50.00
Annual Coupon
3%
Yield per Period
10
Number of Payments

Bond price at different yields

  • Bond price
  • Your bond
  • Face value

Where the price comes from

Bond price$957.35
  • Today's value of the face value $744.09
  • Today's value of the coupons $213.26

In total the bond pays $1,250.00 over 5 years. It's worth less today because money received later is worth less than money now.

Payment Schedule
PeriodPaymentPresent ValueRunning Total
1$25.00$25$24.27$24$24.27$24
2$25.00$25$23.56$24$47.84$48
3$25.00$25$22.88$23$70.72$71
4$25.00$25$22.21$22$92.93$93
5$25.00$25$21.57$22$114.49$114
6$25.00$25$20.94$21$135.43$135
7$25.00$25$20.33$20$155.76$156
8$25.00$25$19.74$20$175.49$175
9$25.00$25$19.16$19$194.65$195
10$1,025.00$1,025$762.70$763$957.35$957
Total$1,250.00$1,250$957.35$957–

What Is a Bond Price?

A bond is a loan you make to a government or company. In return, the issuer usually pays you interest, called the coupon, on a regular schedule, and repays the face value when the bond matures. The bond price is what the bond is worth today: the amount a buyer should pay to receive those future payments and earn the yield they want.

Discount, premium and par

  • Discount: the price is below face value, because the coupon rate is lower than the yield.
  • Premium: the price is above face value, because the coupon rate is higher than the yield.
  • Par: the price equals face value, because the coupon rate equals the yield.

Bond prices and yields move in opposite directions. When yields in the market rise, existing bonds with lower coupons become less attractive, so their prices fall.

How to Calculate Bond Price

Add up the present value of every coupon and of the face value paid at the end:

P= ∑t=1n C(1+r)t + F(1+r)n
  • P: the bond price.
  • C: the coupon per period (face value × coupon rate ÷ payments a year).
  • F: the face value.
  • r: the yield per period (yield to maturity ÷ payments a year).
  • n: the number of payments (years × payments a year).

Example

A $1,000 bond with a 5% coupon paid semi-annually, 5 years to maturity and a 6% yield:

  • Coupon per period: $1,000 × 5% ÷ 2 = $25.00
  • Yield per period: 6% ÷ 2 = 3%
  • Number of payments: 5 × 2 = 10
  • Today's value of the 10 coupons: $213.26
  • Today's value of the $1,000 face value: $1,000 ÷ 1.0310 = $744.09
  • Bond price: $213.26 + $744.09 = $957.35, which is $42.65 below face value, so it sells at a discount.

How to Use the Bond Price Calculator

"A $1,000 bond pays a 5% coupon twice a year and matures in 5 years. If I want a 6% return, how much should I pay for it?" This calculator answers that.

Let's enter the numbers for this example in each box. They are already filled in when the calculator opens, so you can follow along and then change any box to match your own bond.

  • Face Value: Enter 1,000, which is the amount repaid when the bond matures. It must be greater than 0.
  • Coupon Rate: Enter 5, which is the yearly interest the bond pays, as a percent of its face value. Enter 0 for a zero-coupon bond.
  • Coupon Frequency: Choose Semi-Annually, which is how often the bond pays its coupon. You can also choose Annually, Quarterly or Monthly.
  • Years to Maturity: Enter 5, which is the time left until the bond matures. It must make a whole number of payments, so with semi-annual coupons 2.5 works but 2.3 doesn't.
  • Yield (YTM): Enter 6, which is the yearly return in percent buyers want from a bond like this one today. It must be from 0 to 99.99.

Calculate and Reset

Click Calculate to see your results. If a box has a problem, such as a term that doesn't make a whole number of payments, a message pops up under that box instead. With the default numbers you get:

  • Your Results: a short summary in words: the bond's price ($957.35), how far it is from face value, and why.
  • Bond Price: the headline number, with discount, premium or par named under it.
  • Coupon per Period, Annual Coupon, Yield per Period and Number of Payments: $25.00, $50.00, 3% and 10.
  • Bond price at different yields: a curve showing how the price falls as the yield rises. The dot marks your bond, and the dashed line marks the face value.
  • Where the price comes from: a bar splitting the price into today's value of the face value and of the coupons.
  • Payment Schedule: every payment, its present value and the running total, which ends at the bond price. Download Excel saves it with the formulas, so you can change a number at the top of the file and see the price update.
  • Share Results: a link that opens this calculator with your numbers filled in. Copy it, or share it on Facebook or X.

Amounts of $1 million or more are shortened, for example $1.25M. Click Reset to put every box back to its default and show the default results again.

Video: How to Use the Bond Price Calculator