Bond Price Calculator
Calculate bond price using present value of coupon payments and face value
Calculate Bond Price
Principal amount paid at maturity
Annual interest rate as percentage of face value
Number of coupon payments per year
Time until bond matures
Required rate of return for bond investment
Bond Price Results
Present Value Components: Coupons: $335.50, Face Value: $463.19
Premium/Discount: $$-201.30 (-20.13%)
Total Periods: 10 payments
Bond Analysis
Example Calculation
Corporate Bond Example
Face Value: $1,000
Annual Coupon Rate: 5%
Frequency: Annual (1)
Years to Maturity: 10 years
Yield to Maturity: 8%
Calculation Steps
1. Annual Coupon = $1,000 × 5% = $50
2. PV of Coupons = ∑ $50/(1.08)^t for t=1 to 10
3. PV of Face Value = $1,000/(1.08)^10
Bond Price = $798.70
Bond Pricing Components
Coupon Payments
Present value of periodic interest payments
Discounted at YTM rate
Face Value
Present value of principal payment
Received at maturity
Total Bond Price
Sum of all present values
Market value of bond
Bond Pricing Tips
Higher YTM reduces bond price (inverse relationship)
Premium bonds trade above face value
Discount bonds trade below face value
More frequent payments increase bond price slightly
Understanding Bond Price Calculation
What is Bond Pricing?
Bond pricing involves calculating the present value of all future cash flows from a bond, including periodic coupon payments and the final principal repayment. This determines the fair market value of the bond.
Key Factors Affecting Price
- •Interest rate changes (inverse relationship)
- •Credit risk and issuer quality
- •Time to maturity (duration risk)
- •Coupon rate relative to market rates
Bond Price Formula
Bond Price = Σ [C / (1 + r)^t] + [F / (1 + r)^n]
- C: Coupon payment per period
- r: Yield to maturity (discount rate)
- t: Time period (1, 2, 3, ... n)
- F: Face value (principal)
- n: Total number of periods
Note: Bond prices move inversely to interest rates. When rates rise, bond prices fall, and vice versa.