Bond Calculator
Calculate a bond's price and current yield from its coupon rate and market rate.
Assumptions used in this calculation
- Coupon frequency: Assumes annual coupon payments.
About this calculator
A bond's price rarely equals its face value once it starts trading, because the fixed coupon it pays becomes more or less attractive as prevailing market interest rates move, and working out exactly how much more or less requires discounting a whole series of future coupon payments plus the final face-value repayment back to today. This calculator takes a bond's face value, coupon rate, years to maturity, and the current market discount rate, and computes the bond's price as the present value of every coupon payment plus the present value of the face value at maturity, along with its current yield. It saves manually discounting each individual cash flow in a spreadsheet, and it's useful for bond investors checking whether a quoted price is fair given current rates, for understanding why a bond trades at a premium or discount to face value, and for comparing bonds with different coupons and maturities on a like-for-like basis.
Worked example
₹1,000 face value, 5% coupon, 10 years, 6% market rate
Result: Bond price ≈ ₹926.40
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