Bond Calculator
Adjust the inputs below. Results update as you type.
How it works
Bond price = PV of all coupon payments + PV of face value, discounted at YTM. When market rates rise, bond prices fall—and vice versa. Current yield = annual coupon / market price. YTM requires iterative solving (Newton-Raphson). Duration measures interest rate sensitivity; higher duration means greater price swings for a given rate change.
Input guidance
- Use realistic rates from lender or provider quotes instead of headline averages.
- Model conservative, baseline, and optimistic scenarios before deciding.
- Include recurring real-world costs (fees, taxes, insurance, maintenance) where relevant.
The formula
A bond's price is the present value of its future coupons plus face value: price = Σ coupon/(1+y)^t + face/(1+y)^N, where y is the yield per period and N the number of periods.
Worked example
A $1,000 bond paying a 5% annual coupon when market yields are 6% trades below par (around $926), because investors discount its below-market coupons.
More examples to test
- Conservative case: use a higher interest rate and lower growth assumptions to stress-test affordability.
- Optimistic case: use a lower rate with stable income assumptions to compare upside potential.
How to interpret results
Treat this as a planning model, not a final approval tool. Compare at least two scenarios and focus on total-cost and cash-flow trade-offs.
When this can be inaccurate
Results can diverge due to fees, changing rates, tax rules, lender policies, and behavior changes that simplified models cannot fully capture.
Change history
- July 2026: Quality-reviewed for publication with formula checks and explanatory copy updates.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
Why do bond prices fall when rates rise?+
New bonds offer higher coupons, so existing lower-coupon bonds must be discounted to compete, pushing their market price down.
What is yield to maturity?+
The total annualized return if you hold the bond to maturity, accounting for coupons plus any gain or loss versus the purchase price.
Coupon rate vs. yield?+
The coupon rate is fixed on the face value; the yield reflects the return at the current market price, which moves with interest rates.
How should I use this result?+
Treat it as a planning estimate. Compare at least two realistic scenarios, then confirm with statements, quotes, or a qualified professional before acting.
How often should I refresh assumptions?+
Refresh whenever rates, income, costs, or policy limits change materially, and before making irreversible commitments.