How it works
Calculate the theoretical price and current yield of a bond based on its coupon rate and yield to maturity.
Input query strings and outputs
Use an input name in this page’s URL as ?name=value, and join additional inputs with &. Portable shared links may instead use the compact ?ac= state parameter.
Input query strings
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?faceValue=Face Value (Par)Number · Optional · Default: 1,000
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?couponRate=Annual Coupon RateNumber · Optional · Default: 5
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?yearsToMaturity=Years to MaturityNumber · Optional · Default: 10
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?ytm=Yield to Maturity (Market Rate)Number · Optional · Default: 4
Outputs
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resultResultText · Primary output
result contains the calculator’s complete rendered result area, including its visible result cards, tables, charts, and messages.
Determine theoretical bond pricing and yields
Description
The Bond Calculator is a valuation tool for fixed-income investors. It calculates the theoretical fair market price of a bond and its current yield based on its contractual coupon payments and the current prevailing market interest rates (yield to maturity).
Inputs
- Face Value (Par): The amount the bond will be worth at maturity ($).
- Annual Coupon Rate: The fixed annual interest rate the bond pays (%).
- Years to Maturity: The number of years remaining until the bond reaches its face value.
- Yield to Maturity (Market Rate): The current annual return required by the market for similar bonds (%).
Outputs
- Estimated Bond Price: The calculated fair market value of the bond.
- Current Yield: The annual coupon payment divided by the current bond price (%).
- Annual Coupon Payment: The specific dollar amount the bond pays to the holder each year.
- Valuation Summary: Explains if the bond is trading at Par, Premium, or a Discount.
Chart
- N/A: This tool focuses on theoretical valuation and price-to-coupon relationships.
“Good to Know”
- Bond prices and market interest rates move in opposite directions; when market rates (YTM) rise, bond prices fall.
- A bond trades at a Discount when its coupon rate is lower than the current market rate, making the bond less attractive unless the price is lowered.
- A bond trades at a Premium when its coupon rate is higher than the current market rate, allowing the seller to charge more than the face value.
Examples
Example 1: Discount Bond
- Input:
- Face Value: $1,000
- Coupon: 5%
- Years: 10
- YTM: 6%
- Output:
- Price: ~$926
- Current Yield: ~5.4%
Example 2: Premium Bond
- Input:
- Face Value: $1,000
- Coupon: 5%
- Years: 10
- YTM: 4%
- Output:
- Price: ~$1,081
- Current Yield: ~4.6%
Example 3: Par Bond
- Input:
- Face Value: $1,000
- Coupon: 5%
- YTM: 5%
- Output:
- Price: $1,000 (Exactly Par)