Bond Calculator
Calculate a bond's fair price and current yield given face value, coupon rate, years to maturity and the market discount rate.
- Face Value (Principal)$1,000.00 · 67%
- Total Coupon Income$500.00 · 33%
Over 10 years, this bond pays out $500.00 in coupons on top of returning your $1,000.00 principal at maturity.
- Current Yield5.4%
- Annual Coupon Payment$50.00
Trading at a discount (market rate above coupon rate).
About the Bond Calculator
A bond's face value and its price are two different numbers, and confusing them is the single most common bond mistake — a $1,000-face bond can trade well above or below $1,000 depending on how its coupon rate compares to what new bonds are currently paying. This calculator discounts every future coupon payment, plus the face value returned at maturity, back to today's dollars to find the price that's actually fair given current market rates.
This is the calculator for the moment you're looking at a bond quote and trying to work out whether it's priced fairly relative to prevailing rates, or comparing a bond you already hold against what it would be worth if rates have moved since you bought it — both come down to the same present-value math.
The numbers you enter — your bond holdings, the rates you're evaluating — never leave your browser. There's no account needed to run the math on a position you're actually considering.
How it’s calculated
Bond price is the sum of two present-value calculations: every future coupon payment discounted back at the market rate, plus the face value (returned at maturity) discounted back over the full term. When the market rate rises above the bond's coupon rate, future cash flows are worth less today and the bond prices below face value — a discount. When the market rate falls below the coupon rate, the bond prices above face value — a premium.
Current yield, shown alongside price, is simply the annual coupon payment divided by the current price — it's a rougher measure than yield to maturity since it ignores the gain or loss you'd realize by holding to maturity at a price different from face value.
Frequently asked questions
Why would a bond trade for more than its face value?
When a bond's coupon rate is higher than the current market rate for similar bonds, investors are willing to pay a premium above face value to lock in that above-market income stream — the price rises until the yield matches the market.
What's the difference between current yield and yield to maturity?
Current yield only looks at annual coupon income relative to the current price; yield to maturity accounts for that plus any gain or loss between what you paid and the face value you'll get back at maturity. YTM is the more complete picture of your actual return if you hold to maturity.
Why does a bond's price move in the opposite direction of interest rates?
A bond's coupon payments are fixed at issuance. When market rates rise, newly issued bonds pay more, so an older bond with a lower fixed coupon becomes less attractive and must trade at a lower price to offer a competitive yield — and vice versa when rates fall.
Is a higher coupon rate always a better bond?
Not by itself — a high coupon just means more income now, but it doesn't tell you if the price you're paying is fair relative to that income and the bond's risk. Comparing price and current yield against the market rate, like this calculator does, is a better test than the coupon rate alone.
Does this account for a bond being called early or defaulting?
No — this is a standard fixed-schedule bond pricing model that assumes every coupon and the face value get paid exactly as scheduled. Callable bonds and credit risk both change the real picture and aren't reflected here.
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