Bond Calculator
Calculate bond price, yield to maturity (YTM), and interest. Enter face value, coupon rate, market price, and term. Get bond metrics including current yield, approximate YTM, and total interest earned. Informational only—consult a financial advisor. Explore more tools on free calculators on CalculatorBolt.
Calculator
How it works
Bond valuation relies on the time value of money. Current Yield = (Annual Coupon Payment / Market Price) × 100 provides a simple income measure. Yield to Maturity (YTM) is the discount rate that equates the present value of all future cash flows (coupon payments and face value at maturity) to the current market price. Total Interest = (Annual Coupon Payment × Years to Maturity) + (Face Value − Market Price) represents total income from coupons plus capital gain or loss at maturity.
Inputs explained
- Face Value: The principal amount the bond will pay at maturity, also called par value.
- Coupon Rate: The annual interest rate paid on the face value, typically fixed.
- Market Price: The current trading price of the bond in the secondary market.
- Years to Maturity: The remaining time until the bond reaches maturity and principal is repaid.
- Coupon Frequency: How often coupon payments are made per year (annually, semiannually, or quarterly).
Example
Consider a bond with Face Value = $1,000, Coupon Rate = 5%, Market Price = $950, Years to Maturity = 10, and Semiannual payments. The annual coupon is $50. Current Yield ≈ ($50 / $950) × 100 ≈ 5.26%. Because the bond trades below face value, YTM will be higher than the coupon rate—approximately 5.73% when solved iteratively. Total Interest = ($50 × 10) + ($1,000 − $950) = $500 + $50 = $550.
Tips & notes
- YTM is more comprehensive than current yield because it accounts for capital gain or loss and the time value of money.
- Bonds trading at a discount (market price below face value) have YTM greater than the coupon rate.
- Bonds trading at a premium (market price above face value) have YTM less than the coupon rate.
- Coupon frequency affects the timing of cash flows and can slightly alter effective yield calculations.
- YTM assumes reinvestment of coupons at the same rate and holding the bond to maturity.
- This calculator does not account for taxes, transaction fees, or callable/puttable features.
FAQs
Disclaimer
Informational estimate only. Does not account for taxes, call features, or market changes. Consult a qualified financial advisor for personalized advice.