Bond Price Calculator
Price a fixed-rate coupon bond by discounting all future coupon payments and the face value redemption back to today using the required yield to maturity.
% p.a.
% p.a.
years
Coupon frequency
Trading at a discount (coupon rate < yield)
- 1
Periodic coupon payment
1,000 × 5% ÷ 2 = 25r = 6% ÷ 2 = 0.03, n = 10 × 2 = 20. - 2
PV discount factor
(1 + 0.03)^−20 = 0.553676Present value of $1 received n periods from now. - 3
PV of coupon stream
25 × (1 − 0.553676) ÷ 0.03 = 371.9369 - 4
Bond price
371.9369 + 1,000 × 0.553676 = 925.61
How does this calculator work?
A bond's price is the present value of its coupons and face value: P = C × [1 − (1+r)^−n] / r + FV × (1+r)^−n, where r is the periodic yield and n the total periods. Enter face value, coupon rate, required yield and maturity to see whether the bond trades at a premium, discount or par — plus the price-vs-yield curve.
Formula
How this is calculated
A bond's fair price is the present value of all its future cash flows. The issuer pays a fixed coupon (face value × annual coupon rate ÷ periods per year) every period and returns the face value at maturity. Discounting each cash flow at the periodic required yield r = YTM / frequency and summing gives the price: P = C × [1 − (1 + r)^−n] / r + FV × (1 + r)^−n, where C is the periodic coupon, n = years × frequency, and FV is par.
The price-yield relationship is inverse and convex: when the required yield rises above the coupon rate the bond trades at a discount (price < par); when the yield falls below the coupon rate it trades at a premium (price > par); when they are equal, price equals par. This convexity means prices rise faster when yields fall than they fall when yields rise by the same amount — an important risk property.
Assumptions: coupons are paid exactly on schedule with no default; the settlement date coincides with a coupon date (no accrued interest). Real market prices include accrued interest and may differ slightly due to day-count conventions (ACT/ACT, 30/360) and bid/ask spreads. Use this calculator for educational pricing and bond comparison — consult a trading platform for exact settlement prices.
Frequently asked questions
Because investors can now earn a higher return from new bonds, existing bonds with lower coupons become less attractive — their price falls until the effective yield matches the market rate. This is the fundamental inverse price-yield relationship.
Current yield is just the annual coupon divided by the current price — it ignores capital gain/loss at maturity. YTM (the required yield you enter here) is the single discount rate that equates the full PV of all cash flows to the price, capturing both income and the price-to-par convergence.
Not necessarily. A discount bond compensates the buyer with a total return (YTM) higher than the coupon rate. The buyer pays less now and receives the full face value at maturity — the capital gain is built in.
TG we-Calculate Editorial Team. (2026). Bond Price Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/bond-price-calculator
TG we-Calculate Editorial Team. "Bond Price Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/bond-price-calculator.
TG we-Calculate Editorial Team, "Bond Price Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/bond-price-calculator
@misc{wecalculate_bond_price_calculator, title = {Bond Price Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/bond-price-calculator}}, year = {2026}, note = {TG we-Calculate} }
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