Bond Calculator
Give a bond's face value, coupon, yield to maturity and years left, and get its price — premium, par or discount — plus the current yield. The price-yield seesaw, computed.
Price and yield: the seesaw that runs the bond market
A bond's coupon is carved in stone; its price is not. When market yields rise above the coupon, the bond must cheapen until its yield matches the market; when yields fall, the bond earns a premium. This calculator turns a yield into the price that produces it — the mechanism behind every 'bonds fell today' headline.
Price = coupon × (1 − (1 + y)−n) ÷ y + face × (1 + y)−n, per period
Example: a $1,000 bond, 5% coupon paid semiannually, 10 years to maturity. At a 4.5% yield it prices near $1,039.60 (a premium — its coupon beats the market). At a 6% yield it falls to about $925.60. One bond, two prices, nothing changed but the market's mood.
Current yield is not yield to maturity
Current yield (annual coupon ÷ price) ignores the pull back to face value at maturity. Yield to maturity counts everything — coupons, and the certain gain or loss as price converges to face. The result panel shows both; only the second is the bond's actual promised return if held to the end.
How this is calculated
Price = present value of all coupon payments plus the face value, discounted at the yield per period (yield ÷ coupons per year). Clean price only — accrued interest between coupon dates is a settlement addition the page excludes and says so by omission from 'price'. Callable bonds can be redeemed before the maturity modeled here; yield-to-call is a different, lower number on premium bonds.
Frequently asked questions
Why do bond prices fall when rates rise?
A new bond at the higher rate is simply more attractive, so the old bond's price must fall until its total return competes. The relationship is mechanical — the formula on this page is the mechanism.
What is duration, then?
Duration measures how violently the price moves per point of yield change — longer maturity and lower coupons mean bigger swings. This page computes the price at one yield; try the yield ±1% to feel the duration of your specific bond.
Are bond coupons taxed like dividends?
Interest is generally taxed as ordinary income (with exceptions — US Treasuries are state-tax-exempt; municipal bonds often federally exempt). The yield comparisons that matter are after-tax, which is investor-specific and outside this page.
What does 'at par' mean?
Price exactly equal to face value — which happens when the yield equals the coupon rate. It is the seesaw's balance point, visible if you enter the coupon as the yield.
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