Coupon Payment Calculator
Calculate periodic coupon payments for bonds based on face value, coupon rate, and payment frequency
Calculate Bond Coupon Payment
The par value or nominal value of the bond
The annual interest rate as a percentage of face value
Number of coupon payments per year
Coupon Payment Results
Formula used: Coupon Payment = Face Value × (Annual Rate ÷ Payments per Year)
Calculation: $1,000 × (5% ÷ 2) = $25.00
Payment Frequency: Semi-annual
Payment Analysis
Example Calculation
Corporate Bond Example
Face Value: $1,000
Annual Coupon Rate: 5%
Payment Frequency: Semi-annual (2 payments/year)
Calculation
Coupon Payment = $1,000 × (5% ÷ 2)
Coupon Payment = $1,000 × 2.5%
Coupon Payment = $25.00
Annual Total = $50.00
Payment Frequency Guide
Annual
One payment per year
Full coupon rate paid once
Semi-annual
Two payments per year
Most common for bonds
Quarterly
Four payments per year
Better cash flow
Bond Tips
Higher payment frequency provides better cash flow
Coupon rate is fixed for the bond's life
Consider reinvestment opportunities
Current yield changes with bond price
Understanding Coupon Payments
What are Coupon Payments?
Coupon payments are periodic interest payments made by bond issuers to bondholders. These payments represent the bond's yield and are typically made semi-annually, quarterly, or annually until the bond matures.
Key Components
- •Face Value: The bond's par or nominal value
- •Coupon Rate: Annual interest rate percentage
- •Payment Frequency: How often payments are made
- •Periodic Payment: Amount received per payment
Calculation Formula
Coupon Payment = Face Value × (Annual Rate ÷ Payments per Year)
Types of Coupon Bonds
- Fixed Rate: Constant payment amount
- Variable Rate: Payments linked to reference rates
- Zero Coupon: No periodic payments, sold at discount
- Step-up: Increasing payments over time
Note: Current yield differs from coupon rate when bond trades above or below par value