Bond calculator
Price a bond from its yield, or find its yield to maturity from the price, with duration and current yield.
About the bond calculator
Price a bond from its yield, or find its yield to maturity from the price, with duration and current yield.
Part of SmartCalcy’s investing & savings tools. It runs in your browser with no account, uses your own currency and units (change them at the top of the page), and gives estimates for information only, so check official guidance before you rely on a result.
How to use the bond calculator
What it calculates and when to use it
Prices a bond from its yield or finds the yield to maturity from the price, and shows current yield and duration, which measures interest-rate risk.
How to use it, step by step
- Choose price from yield, or yield from price.
- Enter the face value, coupon rate, coupons per year and years to maturity.
- Enter the yield or the price you will pay.
What each input means
- Face value – The amount repaid at maturity.
- Coupon rate – The yearly interest as a percentage of face value.
- Yield to maturity – The return if held to maturity.
How to read the results
- Bond price – Present value of coupons and the face value.
- Current yield – Annual coupon ÷ price.
- Duration – The weighted average time to receive the cash flows. Modified duration estimates the price change for a 1% change in yield.
The formula
Price = Σ coupon ÷ (1 + y ÷ m)^t + face ÷ (1 + y ÷ m)^n. Macaulay duration = Σ t × PV(cash flow t) ÷ price ÷ m. Yield to maturity is solved numerically.
A worked example
A 1,000 bond with a 4% coupon paid twice a year for 10 years, priced to yield 5%, is worth 922.05. Its current yield is 4.338% and its Macaulay duration is 8.26 years.
Assumptions and limits
- The purchase is on a coupon date with no accrued interest.
- No default risk.
- Taxes and dealing costs are excluded.
Common mistakes
- Assuming bond prices cannot fall. They fall when yields rise.
Frequently asked questions
Why does the price fall when yields rise?
A bond’s coupons are fixed, so newer bonds that pay more make older ones worth less.
Related tools
Details
- Annual coupon income
- £40.00
- Current yield
- 4.338%coupon ÷ price
- Macaulay duration
- 8.26 years
- Modified duration
- 8.05about this % price move for a 1% change in yield
- Total coupons received
- £400.00