This bond calculator works out a bond’s price from the market yield, or its yield to maturity (YTM) from the price you would pay. It also shows the current yield, total coupons, and Macaulay and modified duration, which measure how sensitive the price is to interest rates.
Bond price formula
Price = C × (1 − (1 + y)−n) ÷ y + F × (1 + y)−n
C is the coupon per period, F is the face value, y is the market yield per period and n is the number of coupon periods left. Yield to maturity is the yield that makes this formula equal the price; the calculator finds it by trial and error.
Worked example
A $1,000 bond paying a 5% coupon twice a year with 10 years to maturity, when similar bonds yield 6%, is worth about $925.61. It trades at a discount because its coupon is below the market yield. Its modified duration is about 7.67, so a 1-point rise in yields would cut its price by roughly 7.67%.
Key bond terms
| Term | Meaning |
|---|---|
| Coupon rate | Yearly interest paid, as a % of face value |
| Yield to maturity | Total yearly return if you buy at this price and hold to maturity |
| Current yield | Yearly coupon ÷ current price |
| Premium / discount | Price above / below face value |
| Duration | Price sensitivity to interest rate changes |
Why bond prices fall when rates rise
A bond’s coupon is fixed. When new bonds pay more, existing bonds must fall in price so their yield matches the market. Longer bonds and lower coupons mean a higher duration and bigger price swings.
Frequently asked questions
What is yield to maturity?
It is the yearly return you would earn if you bought the bond at today’s price, received every coupon and held it until it matured, assuming coupons are reinvested at the same yield.
Why is my bond trading below face value?
Because its coupon rate is lower than the yield on similar new bonds. The lower price makes up the difference, and you receive the full face value at maturity.
What is the difference between Macaulay and modified duration?
Macaulay duration is the weighted average time to receive the bond’s cash flows, in years. Modified duration converts that into an estimate of the percentage price change for a 1-point change in yield.
Does this include accrued interest?
No. It gives the clean price on a coupon date. Between coupon dates, buyers also pay the seller interest accrued since the last coupon.
Can I use this for Treasury bonds?
Yes, for standard fixed-coupon bonds such as Treasury notes and bonds, which pay coupons twice a year.
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Last reviewed: October 2026. This calculator is for education only and is not financial, tax or legal advice.