Bond Calculator
Bond Parameters
Bond Calculation Results
| Yield to Maturity (YTM) | — |
|---|---|
| Current Yield | — |
| Total Coupon Payments | — |
Understanding Bond Yield and Price
A **bond** is a fixed-income instrument that represents a loan made by an investor to a borrower. The relationship between a bond's price and its yield is inverse: as bond prices rise, their yields fall, and vice versa.
The Bond Pricing Equation
The price of a bond ($P$) is the present value of its future coupon payments plus the present value of its face value (principal) at maturity:
Price = Sum( C / (1 + y/f)^t ) + F / (1 + y/f)^(N)
Where:
- C is the periodic coupon payment ($FaceValue \times CouponRate / f$)
- F is the bond Face Value (Par Value)
- y is the Yield to Maturity (as a decimal)
- f is the coupon payment frequency per year
- N is the total number of periods until maturity ($Years \times f$)
Disclaimer. This calculator is for informational purposes only. Actual bond transactions may involve accrued interest, brokerage commissions, and other fees not modeled here.